"\u003C!DOCTYPE html\u003E\u003Chtml xmlns:xlink=\u0022http://www.w3.org/1999/xlink\u0022 xmlns:xsi=\u0022http://www.w3.org/2007/XMLSchema-instance\u0022 xmlns:mml=\u0022http://www.w3.org/1998/Math/MathML\u0022\u003E\n  \u003Chead\u003E\n    \u003CMETA http-equiv=\u0022Content-Type\u0022 content=\u0022text/html; charset=utf-16\u0022\u003E\n    \u003Cmeta name=\u0022viewport\u0022 content=\u0022width=device-width, initial-scale=1\u0022\u003E\n  \u003C/head\u003E\n  \u003Cbody style=\u0022font-family:sans-serif; font-size:100%;\u0022\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022925c20dc01384e328718977302b520b0\u0022\u003ETUESDAY, 12 APRIL 2016\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022f094b467a0c64e74bcc672a9a7a1ef00\u0022\u003ETUESDAY, 12 APRIL 2016\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000002\u0022\u003EMr Speaker took the Chair at 2 p.m.\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000004\u0022\u003EPrayers.\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000005\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022ea2d1047f90843fc89f67817806a3bae\u0022\u003EOral Questions\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000006\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022ab2ca3a2fa1d4114987a36ba4f76e019\u0022\u003EQuestions to Ministers\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000007\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022698596e619714b6389c44eddf75372f1\u0022\u003ETax System\u2014Panama Papers and Tax Avoidance\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022 data-id=\u0022df3f65834dbc4ff49dde97eeab4d84ff\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E1. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022df3f65834dbc4ff49dde97eeab4d84ff\u0022\u003EANDREW LITTLE (Leader of the Opposition)\u003C/span\u003E to the Prime Minister: Does he stand by all of his statements in relation to the Panama Papers?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022 data-id=\u00221a6faa7ebe614a3fa159efdbfa5d80e7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000009\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221a6faa7ebe614a3fa159efdbfa5d80e7\u0022\u003ERt Hon JOHN KEY (Prime Minister):\u003C/span\u003E Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000010\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b93387fb6d26487a8660834ca849b4dd\u0022\u003EAndrew Little\u003C/span\u003E: Does he accept that the Panama Papers show that New Zealand - based foreign trusts are being used, at the very least, for tax avoidance?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fe328661fba34c7793ab835711bfc785\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: No, I have not seen the Panama Papers, so I cannot comment on whether that is the case or not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220e40d2436a3f481981c5bf7dd3c45c46\u0022\u003EAndrew Little\u003C/span\u003E: Why did he limit the tax dodging review to only the operation of the law in respect of foreign trusts in New Zealand, and not, for example, the law around portfolio investment entity funds and tax paid by multinationals?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000013\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dd32601cfd6d424e85cb880de65a9b5f\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I think the review being undertaken by John Shewan will be quite comprehensive when it comes to disclosure and the issues around tax. Where that will ultimately go is a matter of us working with the OECD, and our officials are going to Paris on Wednesday to be part of a global meeting on that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000014\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221b0de92b981c433b832dc87554ba3235\u0022\u003EAndrew Little\u003C/span\u003E: Why did he push through a law in 2011, which Labour opposed, that cut the tax rate for foreign funds to zero, a move that PricewaterhouseCoopers said put New Zealand on a par with renowned tax havens like Ireland, Luxembourg, and the Caymans?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e9adff11fe448758aa00ed1a98d784d\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: That member would need to direct that question to the Minister of Revenue. I do not have those facts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000016\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b00532fecdd14cb2804a8fa0664cbe33\u0022\u003EAndrew Little\u003C/span\u003E: Can he confirm that New Zealand was kicked off the EU\u2019s white list following his law change because New Zealand no longer had equivalent \u201Clegal requirements of money-laundering and terrorist-financing prevention\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000017\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002294c8f1cf814040e087f2e5fde3a2bb5a\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: No, I do not have that data but I can confirm that New Zealand is ranked in the top 20 in the world when it came to disclosure matters according to the OECD.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000018\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022894d6babe01c42918b425bff3896e9ad\u0022\u003EAndrew Little\u003C/span\u003E: Why does he defend tax-avoiding multinational corporations and owners of foreign trusts who are just using New Zealand to avoid paying tax?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000019\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ae5ddbdb93c949ea94ab66f424b5921c\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: There are a variety of reasons why people use foreign trusts, including ones that may be registered in New Zealand. I am sure many of them are legitimate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002289c265fa511d42c6ba7484aa3560762f\u0022\u003EAndrew Little\u003C/span\u003E: Does he think he has achieved his goal of making New Zealand the Jersey of the South Pacific? And do not pull the wool over our eyes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223f4165e28c4645138d5eb2a14aae4523\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I do think there is a role for New Zealand in the provision of financial services as part of a diversified economy. I think we can do that quite successfully. My other goal has been to lead National to 50 percent in the polls, not 28 percent. [Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220fd9f3fdfb8d4f0b975f5a1311a25ce7\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! I do not mind a certain amount of interjection but when it is getting to that level I am going to have to start mentioning people by name. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4f7d9fa99d34764ae37535e925cbbb1\u0022\u003EAndrew Little\u003C/span\u003E: Has he ever been involved, personally or professionally, in a foreign trust or other vehicle used to reduce tax?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243f259028b8446e9bc3111c504c25274\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I have no ministerial responsibility for that but I am quite happy for the member to look at the answers I gave in my post-Cabinet press conference yesterday.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fdfade655a0a4ed58ca3d2557743e565\u0022\u003EAndrew Little\u003C/span\u003E: Will he join me and release his tax records to dispel rumours that he has benefited from the use of tax havens?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be94e52a51b04523a70b5b85c714d577\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: Firstly, there are no such rumours. Secondly, I do not think the member actually should table his tax return. I think he should table his CV because he will be out looking for a new job soon.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224093fce550e146d9b1eb573f3edd601b\u0022\u003EAndrew Little\u003C/span\u003E: I raise a point of order, Mr Speaker. [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002204594c17c7ba42b286543e53647f6819\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! The Leader of the Opposition wants to raise a point of order. Point of order, Andrew Little.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b7bb1d27c17e47fe8ca78b4051a2ae5a\u0022\u003EAndrew Little\u003C/span\u003E: I seek\u2014[Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d577c32f5db34c71b8c10bc2d3c994c2\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! This is a point of order. It will be heard in silence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022106966ef-8cc3-434a-9dbe-dd76b708c2a1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002290108e07c5af4d52912dba211315c27f\u0022\u003EAndrew Little\u003C/span\u003E: I seek leave to table my income tax records from the year ended 31 March 2010 to the year ended 31 March 2016.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002298566e428d2b4083b01b55b14cca8615\u0022\u003EMr SPEAKER\u003C/span\u003E: Leave is sought to table those particular records. Is there any objection? There is none. They can be tabled. [Interruption] Order! Mr Robertson, when I stand to my feet, it is at that time\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002242abf56d3b9447b68dc467e92963e7c1\u0022\u003EGrant Robertson\u003C/span\u003E: I was distracted over here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222b9f1979a3664162a8d1a979755db0fe\u0022\u003EMr SPEAKER\u003C/span\u003E: I accept that he may have been distracted, but he needs to look in this direction a bit more often.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EDocuments, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000036\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002214be7163041b482a88a78c6dc762fe82\u0022\u003ETax System\u2014Bracket Creep\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022 data-id=\u0022d8b20aa4608543a98c582c6270bef966\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E2. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d8b20aa4608543a98c582c6270bef966\u0022\u003EDAVID SEYMOUR (Leader\u2014ACT)\u003C/span\u003E to the Minister of Finance: Does he agree with the statement made by John Key in 2004 regarding stealth taxation through bracket creep that the government \u201Cloves taxing the hard-working, productive sector of New Zealand. It loves taking extra dollars off those people at every opportunity it can\u201D?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022a44426d8c53b41d3ade2db4d8bf91f9b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a44426d8c53b41d3ade2db4d8bf91f9b\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E The statement made by the Prime Minister was not specifically about bracket creep; it was also focused on the significant personal tax rate increases that had just been introduced. But I do agree that the then Government did enjoy taxing the productive sector and hard-working New Zealand families. That is part of the reason we undertook the 2010 tax reforms: to cut the tax rates on businesses and hard-working families and to provide additional incentives to save, work, and invest. It is part of the reason this Government has a priority of reducing taxes further, subject to fiscal conditions, particularly for low and middle income earners.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221dc16418b3ac4706abae94205c820b28\u0022\u003EDavid Seymour\u003C/span\u003E: How does that square with the fact that by 2017, through stealth tax hikes through bracket creep, this Government will have pinched an extra $2.1 billion from the back pocket of the New Zealand taxpayer since those 2010 tax changes?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a04439711b544dfb015d6f6d6475cf7\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: We could debate the figures. We are currently in a situation where inflation is very low. Since the 2010 tax cuts, we have seen inflation of 5 percent and wage increases of 15 percent, so the main reason people find themselves in higher tax brackets is wage increases. However, there has been some effect from the 5 percent inflation over that 5-year period.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ca916eba2384590b7866179c9f89de7\u0022\u003EDavid Seymour\u003C/span\u003E: Is not a period of low inflation the perfect time to make the shift and index tax brackets to inflation so that New Zealanders will not lose money to stealth taxation?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220acf3110e5a240d3baca223c3ec54581\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: It is a matter of weighing up a range of objectives that the Government has. If we did not have any debt or any need to spend, then it would be a lot easier to reduce taxes at will, but we have to cover the spending obligations that the Government has. This Government has set a target on stopping debt rising and beginning to reduce debt as a proportion of the economy. In that context, there has not really been the room to make the kinds of changes the member is talking about.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4714d1de9b242a2935feaaab679294c\u0022\u003EDavid Seymour\u003C/span\u003E: In light of all finance Ministers complaining of fiscal pressure, is this not really just another example of National campaigning from the right and governing from the left?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c4e92f8ab0fb4706ad949ae74cbbfaae\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: No, National campaigned from the middle and is governed from the middle, and that seems to be reasonably effective. The cost of fiscal drag since 2010 is about half of what the member said\u2014about $1.3 billion per year. Just to put that in context, this very moderate, middle-stream Government has cut ACC levies by $2 billion per year since 2010, twice the amount of fiscal drag.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022afbb66131a9141e7b8da66861c3dc3ff\u0022\u003EDavid Seymour\u003C/span\u003E: I seek leave to table research from the Parliamentary Library showing that the cost of fiscal drag from 2010 to 2017 will indeed be $2.1 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e544051dc2a243ca8098e27e63aa9c8e\u0022\u003EMr SPEAKER\u003C/span\u003E: I will put the leave. Leave is sought to table that information. Is there any objection? There is none. It can be tabled.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EDocument, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000048\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00229f2de7fdc09a442dbaf844c5dd6e591a\u0022\u003EPublic Infrastructure\u2014Capital Investment\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022 data-id=\u002279a8b9389e75427ab2ae8af03b3f9070\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E3. \u003Cspan class=\u0022HpsByToc\u0022 id=\u002279a8b9389e75427ab2ae8af03b3f9070\u0022\u003EBARBARA KURIGER (National\u2014Taranaki - King Country)\u003C/span\u003E to the Minister of Finance: What steps is the Government taking to lift capital spending in transport, education, and other core public infrastructure?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022fc0d7f49fc464d8aad20c3c849520581\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fc0d7f49fc464d8aad20c3c849520581\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E In recent years the Government has accelerated capital spending. The total investment by Government over the next 2 years is expected to be $11.5 billion, $4 billion more than was spent over the previous 2 years. The reason for the increase is that the Government has brought into effect much more rigorous ways of assessing capital investment, and we now have more confidence in the quality of capital investment propositions that we are seeing. Spending over the next 2 years includes $2.6 billion on transport, $1.7 billion in Canterbury, $1.4 billion on schools, and $400 million on ultra-fast broadband.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220de167b22cdc4ad09ed6c35a1fceef1c\u0022\u003EBarbara Kuriger\u003C/span\u003E: What will be some of the other consequences of the Government\u2019s lift in capital spending?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca4ab091cc54448bb2aca1b8b19645d1\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: The Government has a choice between the level of investment in infrastructure and other capital investment, like information technology, versus the amount and timing of debt rate repayment. All things being equal, the lift in capital spending will mean a slightly higher debt track than would otherwise have been the case, and, potentially, a later start date for paying down debt. The Government has lifted this capital spending, though, because of the quality of the initiatives\u2014that is, we believe they are sound investments in the future growth of the economy. At the same time, we remain on track to meet the fiscal target of net debt of around 20 percent of GDP by 2020.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ae7a4255814f42d1bfd0531ddc01b9d4\u0022\u003EBarbara Kuriger\u003C/span\u003E: How has the Government\u2019s investment in infrastructure been making a difference in regions like Taranaki - King Country?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002266259ab4b91549718103cf62d1a06c8b\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I have some information relevant to Taranaki - King Country. Earlier this year the Government announced that it is accelerating the Awakino Gorge tunnel bypass as well as the Mount Messenger bypass, with these investments totalling around $100 million. As the member knows, it is often pointed out that these are vital freight links into the Taranaki region. These are just one example of the accelerated regional roading programme that covers Gisborne, the West Coast, Horowhenua, Otago, and Northland.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022334671d5f2a74aa186a06949c66633e7\u0022\u003EBarbara Kuriger\u003C/span\u003E: How is the increasing infrastructure investment supporting jobs growth?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca7d05e5c9d94c4181047bc6e7ea9d0a\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: We are lifting our investment partly because surrounding our workers with capital will, over time, boost productivity and lift wages. We are seeing significant job growth. Treasury estimates that the Government\u2019s roads of national significance programme will involve around 35,000 construction jobs, and a further 4,000 jobs are expected from the ongoing roll-out of ultra-fast and rural broadband. However, long after the jobs of constructing have gone because the projects are finished, the ongoing economic benefits of this consistent pipeline of high-quality investment will be paying off for the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000057\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022a20f282422aa4e498d53413d506ab52b\u0022\u003EHealth Services\u2014Elective Surgery Access\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022 data-id=\u0022af333d5033d140a89bcad5ae3a61bf49\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E4. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022af333d5033d140a89bcad5ae3a61bf49\u0022\u003EHon ANNETTE KING (Deputy Leader\u2014Labour)\u003C/span\u003E to the Minister of Health: Does he agree with the findings of the recent TNS survey showing about 174,000 New Zealanders are in need of publicly funded surgery, but have not been placed on a waiting list; if not, why not?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022 data-id=\u002238554db3ab2242a29582fae35a6790dd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002238554db3ab2242a29582fae35a6790dd\u0022\u003EHon Dr JONATHAN COLEMAN (Minister of Health):\u003C/span\u003E No. The telephone survey by the health insurance industry of people\u2019s perceptions of what they need is not the same as being medically assessed as being in need. Over 7 years, this Government has lifted the number of specialist appointments by 25 percent and the number of operations by 41 percent. The only answer to increasing demand is to do more, and we are.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230011d57571340a98fa03d82870e5c3b\u0022\u003EHon Annette King\u003C/span\u003E: In light of that answer, why does he dismiss the TNS New Zealand survey showing 174,000 people are blocked from elective surgery as just the Health Funds Association of New Zealand trying to \u201Cdrum up business\u201D, when his ministry used the same global research company to carry out research for the Government. Was that research shonky?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef17b7bf18314df1aff2ef0d8040b2ec\u0022\u003EHon Dr JONATHAN COLEMAN\u003C/span\u003E: Why I do not agree with them is because we now have literally a handful of people waiting over 6 months for surgery\u2014unlike 8 years ago when there were 30,000 people waiting for over 6 months for surgery\u2014and only 2,000 waiting for over 4 months. It is very different to 8 years ago when $3 billion extra went into the Budget to deliver 2,000 fewer operations and 7,000 fewer appointments\u2014under Mrs King, of course.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286f134822a1d486ebc3bd45ffe786d48\u0022\u003EHon Annette King\u003C/span\u003E: Having had time to read the research published last week in the New Zealand Medical Journal, does he agree with the findings that patients currently being returned to their GP without an operation would have qualified for publicly funded surgery during the 2006-10 period; if not, why not?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228060e308ae934feda735b4cea7516215\u0022\u003EHon Dr JONATHAN COLEMAN\u003C/span\u003E: They may or may not have\u2014I mean, there are different surgical thresholds around the country. All we do know is that back in the period that the member mentioned, 31,000 people were kicked off surgical waiting lists by her.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ea64f7f0cda94eed95c338008cc5dfa0\u0022\u003EHon Annette King\u003C/span\u003E: If he has read the research published in the New Zealand Medical Journal on 1 April, will he now correct his Associate Minister\u2019s answer from last week that hip and knee operations were up by 10 percent for the Southern District Health Board, when the latest figures show that there has been nearly a 10 percent decrease\u2014decrease\u2014since 2011?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e092576e6bc4bdf8278b10bacade7eb\u0022\u003EHon Dr JONATHAN COLEMAN\u003C/span\u003E: No. I dispute Mrs King\u2019s figures and I am not going to correct the Associate Minister\u2019s answer. I think that he did a really good job in showing you up, actually.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022475497c2da29461a9311724a8521ae56\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! [Interruption] Order! The Minister should not bring the Speaker into the debate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223ccd01dca3b445c4b7a73be2ce874531\u0022\u003EHon Annette King\u003C/span\u003E: I seek leave to table an Official Information Act request delivered on 7 April 2016 by the Ministry of Health for the Southern District Health Board, showing a 10 percent decrease. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a54f3777f9740fb8dd79c0716a853eb\u0022\u003EMr SPEAKER\u003C/span\u003E: Leave is sought to table that particular information. Is there any objection? There is none.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EDocument, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002291a3db87cdd94a38a766c2644c1285d6\u0022\u003EHon Annette King\u003C/span\u003E: When he said today that \u201Cthere\u2019s a difference between surgery people actually need, and surgery people think they need.\u201D, does he really believe that people wake up in the morning and think: \u201CI\u2019d like to have an operation today. I feel like going under the knife. My pain is just phantom pain. I fancy one of those\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0d378131fa248d0891c657d4f8f53e5\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! Bring the question to a conclusion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a75b9841919c45208e4bdfd7c4bfcb49\u0022\u003EHon Annette King\u003C/span\u003E: \u2014\u201Chospital meals that the Minister tried.\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002272aa893a36ec4af78f1a2a1d7fc1f913\u0022\u003EHon Dr JONATHAN COLEMAN\u003C/span\u003E: Firstly, I am very glad to hear that the member is following my interviews on Newstalk ZB so closely. I notice that she actually had the opportunity to try one of those hospital meals yesterday in Dunedin, but I guess the crisis talks were so intense that there was no opportunity to go and front up and do what she challenged me to do. I did, and it was a very good meal. Why do you not man up and do it yourself, because you think you are so tough?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ecc248dda4464ecba2bc50fffd0b3595\u0022\u003EHon Annette King\u003C/span\u003E: I raise a point of order, Mr Speaker. It is impossible for me to \u201Cman up\u201D\u2014I am a woman.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002233764d529b824706b0adda565b691a94\u0022\u003EMr SPEAKER\u003C/span\u003E: And a very capable one, as well. [Interruption] Order! We return now to question time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000076\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022bf3e62f96e6e42cfad595518c94dcba7\u0022\u003ETax System\u2014Overseas Trusts Review\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022 data-id=\u0022840996d5b289486ca2b960d0c787e025\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E5. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022840996d5b289486ca2b960d0c787e025\u0022\u003EJAMES SHAW (Co-Leader\u2014Green)\u003C/span\u003E to the Minister of Finance: Will there be the opportunity for public submissions as a part of his review of foreign trusts?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u00222cb073cfb638423c92fab2850fa9bdc2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222cb073cfb638423c92fab2850fa9bdc2\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E The task of the review is to understand the technical issues and identify opportunities to strengthen the disclosure regime for foreign trusts. That is the purpose of the independent expert review. As is normal practice for this kind of review, public submissions will not be heard at this stage. However, as the Prime Minister has said, the Government is open to considering changes to the disclosure rules that are warranted. Should legislative change be required, for example, public submissions will be invited in the usual way through the select committee process, and, generally, changes in tax law, if that is what was involved, go through a public consultation process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022839b3b7e56c5450ca11f263f3f5acc36\u0022\u003EJames Shaw\u003C/span\u003E: If he will not allow the public to make submissions as part of the review process, will he guarantee that transparency and anti-corruption experts will be invited to give their expert opinions?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022130c5e31ced54db0a9a5b53fb453ebc5\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: They seem to be giving their opinions now. Some seem to be less informed than others, but the independent review will continue. Mr Shewan is not going to be taking public submissions, but I am sure he will be looking at all the relevant material the member is referring to. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a58c1b5f43a46b08f3c0811114d3cf8\u0022\u003EJames Shaw\u003C/span\u003E: Am I to take from his answers, then, that Mr Shewan will conduct his review without referring to anybody external, other than his own opinion?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227cd756a61c54428ba89b4abbc9aeefe1\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I am sure he will refer to all sorts of external opinions and technical material, but in the end he will give us a report that is his view of it. That will be open to contest by anyone who wants to argue about it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002265711b38b9bd4c108dfb6e72fdd938b4\u0022\u003EJames Shaw\u003C/span\u003E: Will all evidence from the review be open and available for public scrutiny?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a665a65186174107b5a66ea1d9bd042e\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I am sure that it will, subject to any relevant privacy considerations such as New Zealand\u2019s tax privacy law\u2014if that is relevant, and I do not actually know whether it is or it is not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ec38d40dbb864e40ada4c542bca05ee8\u0022\u003EJames Shaw\u003C/span\u003E: Does the Minister think that having a single poacher act as gamekeeper will restore public confidence in our foreign trust industry?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c0e8730b06a644e2a82aa0fe6e17b744\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I reject the member\u2019s characterisation. The fact is that nothing we could do will satisfy the Greens, who are fundamentally opposed to capitalism, profit, taxation, and people getting ahead and making money. We cannot deal with all those\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a4e7da1c12b4be5b4db215c9394ad55\u0022\u003EJames Shaw\u003C/span\u003E: I raise a point of order, Mr Speaker. I was not asking for a review of Green Party policy. I was asking whether or not the evidence would be open to public scrutiny.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d2bfb83aee364d979b7bf2f54a5aefac\u0022\u003EMr SPEAKER\u003C/span\u003E: The question was fairly loaded. The answer was certainly given in the first part, and the second part of the answer does not add anything to the information before the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca23ba0d7cae461db5652e6e071a1119\u0022\u003EJames Shaw\u003C/span\u003E: Does it matter whether or not New Zealand fits the legal definition of a tax haven if it is being used as one anyway?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b187a6cff736462f85cb8e9a5f4d5178\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: There has been a lot of discussion about whether New Zealand is a \u201Ctax haven\u201D. Any country that has a commercial structure, such as companies, could be described as a tax haven if they are used by some people to avoid tax. We reject the label of tax haven, but of course we are open to expert advice about whether the disclosure rules around foreign trusts are adequate or not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000091\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022599c95f552f64eeeaff245bab7a4038d\u0022\u003EEconomy\u2014Diversification\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022094b0ff4-e404-451b-b4a9-ad12bd4dee56\u0022 data-id=\u0022dcbb22a14e5f4623ab2f0e3f4003324b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022094b0ff4-e404-451b-b4a9-ad12bd4dee56\u0022\u003E6. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dcbb22a14e5f4623ab2f0e3f4003324b\u0022\u003ESTUART SMITH (National\u2014Kaik\u014Dura)\u003C/span\u003E to the Minister for Economic Development: What reports has he received about diversification of the New Zealand economy?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022 data-id=\u0022b397cc5eea144204977fe228b544a0c1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b397cc5eea144204977fe228b544a0c1\u0022\u003EHon STEVEN JOYCE (Minister for Economic Development):\u003C/span\u003E I have seen a number of recent reports that demonstrate that diversification. Despite the downturn in the dairy industry last year, our exports in the calendar year were up $1.9 billion, to $69.3 billion. So even with the decline in dairy exports of $3 billion, the rest of the export economy grew by $4.9 billion. Tourism is up; in the primary industries, meat exports were worth $6.8 billion in 2015, up 15 percent in 1 year; wool exports were up 8.2 percent; fruit up 30.6 percent; and wine exports were up 13.6 percent, with further growth likely. I am advised that just in the member\u2019s area of Marlborough there were 2,000 hectares of new plantings last spring, with another 2,000 hectares in the next year. High-tech manufacturing continues to grow. What was once a $100 million industry has grown to nearly $1.5 billion in exports.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022094b0ff4-e404-451b-b4a9-ad12bd4dee56\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022665101ce59bf4faea6144b393a02000e\u0022\u003EStuart Smith\u003C/span\u003E: How is the Government encouraging continued diversification of the New Zealand economy?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a2e73a1bbce84b32a6728387319b8d74\u0022\u003EHon STEVEN JOYCE\u003C/span\u003E: Encouraging businesses to innovate and create new products and services is a crucial part of diversifying our economy. That is why we have set up Callaghan Innovation, our new high-tech innovation hub. We have established primary growth partnerships to extract more value from the primary sector, and we have brought in a new research and development grants programme to replace the failed tax credit scheme. Our focus on encouraging research and development is bearing fruit. Last year business spending on research and development grew by more than 15 percent, according to Statistics New Zealand. Through New Zealand Trade and Enterprise we are working with businesses in cities and regions to make the most of exports. We have established ICT grad schools, to put more money into science, technology, engineering, and mathematics education, and we are signing free-trade agreements, like the Trans-Pacific Partnership and the Korean free-trade agreement, to give our businesses market access.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022094b0ff4-e404-451b-b4a9-ad12bd4dee56\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d38104d552af4db0a647932c2417f890\u0022\u003EStuart Smith\u003C/span\u003E: How has this diversification provided more opportunities for New Zealanders?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002249791de385a5472abd0d9aef7a9165ec\u0022\u003EHon STEVEN JOYCE\u003C/span\u003E: In a number of ways. New Zealand, over the last 6 years, has had the seventh-highest rate of economic growth across the OECD. Despite doom and gloom from some quarters, New Zealand now has the third-highest rate of employment in the OECD. We have had employment growth of 10 percent over the last 6 years, and also 10 percent growth in total hours worked. This is having a positive effect on wages. From 2003 to 2008, prior to the global financial crisis, real wage growth over that period was just 5 percent. In the last 6 years real wage growth has been 8.7 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207dc4112-8a19-4dd6-a57c-878b47f8a9b6\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022027076bc9dd742169e64d1f73edc2c98\u0022\u003ERon Mark\u003C/span\u003E: Clearly out of touch.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f15111241b34803a15ff4f1dacac96a\u0022\u003EHon STEVEN JOYCE\u003C/span\u003E: Yes, it has.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000100\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002243801dec942c4ef8ad497353759d1212\u0022\u003ETax System\u2014Overseas Trusts Review, Appointment of John Shewan\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022 data-id=\u0022871e20344c4343fd875f5c4ed675524d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022871e20344c4343fd875f5c4ed675524d\u0022\u003ERt Hon WINSTON PETERS (Leader\u2014NZ First):\u003C/span\u003E This question is to the Prime Minister\u2014[Interruption]\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022 data-id=\u00224a351f79e680472abb24218662f89580\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224a351f79e680472abb24218662f89580\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! Sorry, order! There is quite a lot of interjection occurring. I am going to invite the member to start his question again.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022 data-id=\u0022c3cbb64ebcd14f86a04b33ec8441dcf2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E7. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c3cbb64ebcd14f86a04b33ec8441dcf2\u0022\u003ERt Hon WINSTON PETERS (Leader\u2014NZ First)\u003C/span\u003E to the Prime Minister: Does he stand by all his statements? \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022 data-id=\u0022f22e292f2c6b4d09bcd712f03183b864\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f22e292f2c6b4d09bcd712f03183b864\u0022\u003ERt Hon JOHN KEY (Prime Minister):\u003C/span\u003E Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a3f1e92d1564c8587b4a1a855c291ce\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: When he said that Mr Shewan was independent, was he aware of his Westpac Banking Corporation, Australian-owned, bank settlement of $2.2 billion to the Inland Revenue Department, which it had attempted to evade in terms of taxation?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022743b427969ec475ca64bda4f59944d8f\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I would not want to agree with the member\u2019s characterisation, but, yes, I am aware he worked on the issue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022367e7cab27684ae8bac0ebce8f60d6c0\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: When he made the appointment about his expertise, was he aware of the case Penny v Hooper where the Court of Appeal and Supreme Court dismissed Mr Shewan\u2019s evidence as being inappropriate from an expert witness?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225b8449ca10ae4f4c8893ce783d5cb6b7\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I was not aware of that particular point but I would say this: John Shewan has been highly respected across the tax industry in New Zealand. He has been chairman of PricewaterhouseCoopers. He is someone who was given an award either in the Queen\u2019s Birthday or in the New Year\u2019s Honours. Frankly, actually, when it comes to financial expertise and knowing what he is talking about, he runs rings around that member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222fabd758ca254ad4a0e5d1bb4733641f\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: I raise a point of order, Mr Speaker. My question was about a case in 2010. Either he was aware or he was not aware, and after that he should have been stopped.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225cc2efc5188f412297f3a72d57e01c9f\u0022\u003EMr SPEAKER\u003C/span\u003E: The Prime Minister immediately said he was not aware of that particular case.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227273d8b8350d49c5907ba1bce9f1a602\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: I raise a point of order, Mr Speaker. When he said he was not aware\u2014[Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229880fdef7d39465eb678cd1156390f85\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! It is a point of order. I wish to hear it in silence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220676c28d41544b799b94d3f9948f9542\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: When the Prime Minister said he was not aware, why then was he not stopped from rambling on about something he was not asked about?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229bb3085e1ed842db824987052303db82\u0022\u003EMr SPEAKER\u003C/span\u003E: The member makes a reasonable point. As I have mentioned many times in this House, I will determine when I think an answer has gone on for too long.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ebfdf672aab84a81b501707f9ca41a93\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: When the Prime Minister made the statement about the expertise of Mr Shewan, was he aware of how his so-called expertise on form over substance on the wine-box allegations conflicted with the Privy Council, the Court of Appeal, and the full High Court of New Zealand?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227ac7d0c0c9c84c0b83d8698a0c3f1545\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I am aware of John Shewan\u2019s complete integrity. That is not something I am sure of when it comes to every member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e133059ac59b4c6fb1b73d4fcc1f04c8\u0022\u003EChris Hipkins\u003C/span\u003E: I raise a point of order, Mr Speaker. There are reasonably clear rules\u2014and that have in the past been enforced\u2014about questioning the integrity of other members in the House, which stops members from doing so for very good reasons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f209fb2d16f0418db7b61934c744a627\u0022\u003EMr SPEAKER\u003C/span\u003E: And on that occasion it was not addressed to any particular member, as I took it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022afb40b04cd1c42dba0038fe55ba9de84\u0022\u003EChris Hipkins\u003C/span\u003E: I raise a point of order, Mr Speaker. In which case it was directed at all members, in which case I take offence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002284ef6bdb931c426bb63f31ac221f22ae\u0022\u003EMr SPEAKER\u003C/span\u003E: On the basis that Chris Hipkins is offended I am going to ask the Prime Minister to stand and withdraw the last part of that answer.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac6ba52f72c64b6aa0260082162dc56b\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: Sorry, Chris. [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022507134ee0e3b4b0cb36034df32dd0836\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! The right honourable Prime Minister will now stand and withdraw it correctly, without any addition.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002245d8b8c68ca748a3a4f812c8cb646910\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: I withdraw.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002289ef47066999423e9d142288d9c0a4f0\u0022\u003EMr SPEAKER\u003C/span\u003E: Supplementary question\u2014Order! [Interruption] When I am on my feet, the Hon Amy Adams, equally, should be quiet.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002216449afad0cf4679bc7a2d8ce08ca95c\u0022\u003EDavid Seymour\u003C/span\u003E: In what century did the wine-box inquiry take place?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022596bb71cd9d746f1b683af1ef861b011\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: One so far back I can hardly remember it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220ae35a6ea6194e0ca8a73e86c0c88f5a\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Why did he tell The Paul Henry Show yesterday that he was taking a paper to Cabinet that morning proposing the appointment of an international tax expert?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223ed514a8c6cc47919b07224a3ef42def\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: Because I did.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e0dd55431b8a43f2a666cb0de8f0a528\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: So what happened to the international tax expert? Did he turn you down?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a4daad4cae7248c2bf37ed6202c4622b\u0022\u003EMr SPEAKER\u003C/span\u003E: Well, he did not turn me down.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022768a0e9f7a29469ea4e2da1bed8aa393\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: The member can come into the House and abuse and bag Mr Shewan if he wants, but Mr Shewan has a glittering career. I will get him to reflect on his own.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229cba7be0384f4d15b2286b7b5260e376\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Point of order. Why\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022878b60791bf749cebad4d48be624e7fc\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! [Interruption] I have not called.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022578d1cb459c44a6ba03bb6a9abe1aa0c\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: I raise a point of order, Mr Speaker. Why is the Prime Minister allowed to lace up the end of every inferior answer with an epithet or insult?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227bc699a46aed450f9579f090978ec550\u0022\u003EMr SPEAKER\u003C/span\u003E: I invite the member to go back and, equally, look at his question, where he finished his question by saying \u201CDid he turn you down?\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226079357539b74943b74676607d35f228\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Is this highly independent John Shewan the same John Shewan at National\u2019s caucus party, held at Premier House, hosted by the Prime Minister?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227fe20889758e40bfa8a40a0822e35857\u0022\u003EMr SPEAKER\u003C/span\u003E: If there is any ministerial responsibility, the Prime Minister.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022424418ad175f461f9cc18eae336fec5d\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: Probably, and so were the parliamentary press gallery and many other people. People love coming to a National Party function. It is a lot of fun. You used to be the cheerleader amongst them, Winston.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002204e33d2938094300aeb4e727ab5a0f53\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! [Interruption] Order! I am just waiting for silence from my left.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002269035047d8a34265a554d6763e2a50e2\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: I raise a point of order, Mr Speaker. Once again, why is the Prime Minister allowed to get away with an end to an answer like that over and over again?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002285e6f64674074352867f8d5d777595b4\u0022\u003EMr SPEAKER\u003C/span\u003E: I suspect if I had been applying the rules very strictly, the question was out of order. It asked about an issue for which there is no prime ministerial responsibility. It is a party matter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221ba485d907414c2abde0bd237db0d9cc\u0022\u003EHon David Parker\u003C/span\u003E: I raise a point of order, Mr Speaker. Why is it that you allow a question, presumably because it is in order, and yet when challenged as to allowing out-of-order replies, always flick the complaint away by saying \u201CI shouldn\u2019t have allowed the question.\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a3be2a41e926428c840ea7ea32e84c83\u0022\u003EMr SPEAKER\u003C/span\u003E: No, I didn\u2019t\u2014[Interruption] Order! I am happy to try to help the member. I did not say I should not have allowed the question. I said the question was not strictly in line with the Standing Orders. I can start, if the members want me to, to apply them very, very rigorously. I suspect it would not be to the advantage of the Opposition, and I suspect after a relatively short period of time members would wish that I did not do that. But in that particular case, given the question the way it was asked and the answer the way it was given, I was satisfied that it was within the bounds of the rules.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002249a8061e082741119ca093784521e2cf\u0022\u003EHon David Parker\u003C/span\u003E: Point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f45bbc4d86c46a69f280f26b17fddb5\u0022\u003EMr SPEAKER\u003C/span\u003E: Before I take any further points of order, if it is in any way relitigating the decision I have made and the answer that I have given\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022426cd5a3be634628811b79016be332fb\u0022\u003EHon David Parker\u003C/span\u003E: No, it is not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225833464013314462a40c86ecf3a384be\u0022\u003EMr SPEAKER\u003C/span\u003E: If it is a fresh point of order, I am happy\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c1854da77d5e4d0e84e246aec65d35e9\u0022\u003EHon David Parker\u003C/span\u003E: It is a fresh point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022612f82fbf018417ea5c5f68f2ec30253\u0022\u003EMr SPEAKER\u003C/span\u003E: A fresh point of order\u2014the Hon David Parker.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243fc3262ceb647c6806ad9c0b90eaaaf\u0022\u003EHon David Parker\u003C/span\u003E: I raise a point of order, Mr Speaker. How was the question out of order?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022062ff53311234f58b4c5ae4a04c0b105\u0022\u003EMr SPEAKER\u003C/span\u003E: I thought, again\u2014[Interruption] Order! I will try to explain it. The issue was about the attendance at a National Party function. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002207fcdf972f4f4d41a9642fcebd7c8857\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224d017a230604423da577e88546f6552d\u0022\u003EMr SPEAKER\u003C/span\u003E: Well, as I heard it, it was, and that is the\u2014[Interruption] Order! My patience is running extremely thin with Dr Megan Woods. If she continues to interject, particularly when I am standing on my feet, she leaves me no choice but to ask her to leave.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243fdc0206d08425f985cbcfd4977ca2e\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Can he confirm that Mr Shewan was a longstanding partner and chairman of PricewaterhouseCoopers New Zealand, the same accounting firm that was directly implicated in the 2014 Luxembourg Leaks scandal?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264b8cd42708a442d9ec4f86c95743f24\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: In answer to the first part of the question, yes; in answer to the second part of the question, no, I do not know what the member is talking about.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dadad4f0df3c4038ad2576a0830b4bae\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Is he aware of the connection between PricewaterhouseCoopers and the Cayman Islands organisations and companies and trusts and one Codan Trust Company (Cayman) Ltd? Is he aware of that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221b831e7317f14d849125594db3c3725c\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227de0773f1e95427ab8487c1fe1d808f3\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: I seek leave to table relevant documents that relate to that last question of the Prime Minister, where he appears blissfully unaware of what is going on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f38514da54f2468a9b31ecb15551d642\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! No. Just explain the documents.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229820c038b0564fe9b3a7541d6319850d\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: Well, you will not find them around.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002211503626cf034424b7cfa3749279fed8\u0022\u003EMr SPEAKER\u003C/span\u003E: Just explain\u2014[Interruption] Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223a0c42a68da648d895b28e7943fa9fda\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: This is a corporate record and register, not available for public inspection, that I seek to table.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca07d4f444e5487890582a5a55701a21\u0022\u003EMr SPEAKER\u003C/span\u003E: Leave is sought to table that particular corporate record. Is there any objection? [Interruption] Is there any objection? There appears to be no objection; the member can table it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EDocuments, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000165\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002216eac7b030d94a1bbfd88c49c6a810e5\u0022\u003EChild, Youth and Family\u2014Reforms\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002258eae615-ef83-4df5-bace-6749bdd312a8\u0022 data-id=\u0022c472d3a7ea3b493a834b92e647d7659c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258eae615-ef83-4df5-bace-6749bdd312a8\u0022\u003E8. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c472d3a7ea3b493a834b92e647d7659c\u0022\u003EDr PARMJEET PARMAR (National)\u003C/span\u003E to the Minister for Social Development: What feedback has she received regarding the overhaul of Child, Youth and Family?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022977cccaf-581d-4f48-924e-32bf6c54a93d\u0022 data-id=\u0022cbcb039233f340e5b0b1357b92bc4d1b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022977cccaf-581d-4f48-924e-32bf6c54a93d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cbcb039233f340e5b0b1357b92bc4d1b\u0022\u003EHon ANNE TOLLEY (Minister for Social Development):\u003C/span\u003E I have received overwhelmingly positive feedback on my announcement that Child, Youth and Family will be transformed to be truly child-centred. Such feedback is heartening, as we will need the continued support of a wide range of organisations while we continue this important work. Unicef has stated that the overhaul is \u201Cthe most comprehensive example of Government actively seeking to hear diverse voices, including those of children,\u201D. The Children\u2019s Commissioner has said that the overhaul \u201Cis visionary and has potential to change the lives of many vulnerable children.\u201D Barnados has said that it agrees \u201Cwholeheartedly \u2026 that all of us as New Zealanders must step forward and claim our vulnerable children as our own.\u201D This is a fantastic opportunity to deliver lasting change for our vulnerable children, and it is only the beginning.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258eae615-ef83-4df5-bace-6749bdd312a8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225ba656c1cd784137ae52b7994c572572\u0022\u003EDr Parmjeet Parmar\u003C/span\u003E: How will she ensure that the voice of the child is heard in the overhaul of Child, Youth and Family?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022977cccaf-581d-4f48-924e-32bf6c54a93d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cd6783424af14d549024be17647f691f\u0022\u003EHon ANNE TOLLEY\u003C/span\u003E: To create a truly child-centred system, this transformation requires the voice of the child to be heard throughout, which is why I am establishing New Zealand\u2019s first ever independent advocacy service for children and young people in care. The advocacy service will involve children and young people in the decision-making process throughout the overhaul and will ensure that their expectations are met by the system. I am also delighted that my Youth Advisory Panel will be re-established to provide advice and feedback to me as the work continues over the next year on transforming the system. Our vulnerable young people deserve to have a voice in their care, and we want to ensure that their voices are heard.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022861cf645d1e544aa88c709f527c2b825\u0022\u003EJacinda Ardern\u003C/span\u003E: Will she rule out the use of private entities like Serco for the provision of directly purchased services, as she has set out in her reform?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022977cccaf-581d-4f48-924e-32bf6c54a93d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227e76f6bae6c34919a8f1df4675b1f64a\u0022\u003EHon ANNE TOLLEY\u003C/span\u003E: As I have been very clear, the proposals for the new operating system will be contracting out services on a direct purchase basis in order to provide for children\u2019s needs as they need them. But, as I have also been very clear, these are about individual children, and, therefore, the services would be based on that individual need. It is the intention that they be local and that they be immediate, and that would discount any major large private enterprises.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000172\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00228a986685b0094a818d5f859fd61922a1\u0022\u003ETax System\u2014Overseas Trusts\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u00222520ca014e0248bf93d3eb7edf628c77\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E9. \u003Cspan class=\u0022HpsByToc\u0022 id=\u00222520ca014e0248bf93d3eb7edf628c77\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central)\u003C/span\u003E to the Minister of Finance: Does he stand by his statement \u201Cit has become pretty much unacceptable in the developed world at least to be running a tax haven that undermines other people\u2019s tax bases\u201D?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022b01cefa000b24f388593af5dea4e082e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b01cefa000b24f388593af5dea4e082e\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226b8390a24f7c4bc3b77f3400a974ca75\u0022\u003EGrant Robertson\u003C/span\u003E: Brief but not memorable. How can he justify a regime, which he helped to create and continues to defend, that has led to the undermining of the tax base in a country such as Malta, where senior politicians use New Zealand\u2019s trusts and managed funds to make tax-free profits, and that has led to the Maltese people protesting in the streets?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222138ff64f2554fb094d9b571ea9725ea\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: Of course, it is up to the Maltese Government to decide whether any of those allegations are actually correct, and it may well ask for information from New Zealand, which, of course, it would supply. These matters will be dealt with by the expert review.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002201295f9dd575485584cf3dbf9c512187\u0022\u003EGrant Robertson\u003C/span\u003E: How can he deny that New Zealand is eroding the tax base of a country like Malta when its tax evasion came via \u201Ca combo pack\u201D from New Zealand designed to exploit New Zealand\u2019s \u201Cweak \u2026 due diligence;\u201D\u2014as described by Mossack Fonseca\u2014and has been made up of \u201CNew Zealand foreign trusts (which pay no tax on foreign income) and what is described as Look Through Companies \u2026 which could be owned by the trusts.\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022190833b272df4971b5858334085cf2bf\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: Not being an expert on those matters, I would not want to comment on the tax affairs of the Maltese Prime Minister, or whomever the member is actually referring to. The expert review will deal with the issue related to disclosure\u2014about what happens with these foreign trusts. Bear in mind that anyone who transacts in New Zealand is now subject to anti - money-laundering provisions, another regime called the Foreign Account Tax Compliance Act, and a further regime called the Automatic Exchange of Information, all of which are part of New Zealand\u2019s effort to play its part in the global work to reduce tax evasion and avoidance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002299fbcce419724b29bd3d9ef4b2e91105\u0022\u003EGrant Robertson\u003C/span\u003E: Was Chapman Tripp wrong in its advice about the changes his Government made to allow for a zero tax-rating of non-residents\u2019 managed funds: that this put New Zealand \u201Cin the same league as Luxembourg\u201D, the very country he was talking about in the quote during the substantive question?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002242b7e00fe2ec42d6a9f30385f628d789\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I have not seen its advice and cannot comment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ddac2b702d3f4281afce85bcce4806f9\u0022\u003EGrant Robertson\u003C/span\u003E: Why should the international community take seriously New Zealand\u2019s calls for a crackdown on multi-national companies in New Zealand that are not paying their fair share and are eroding our tax base when we are implicated in eroding the tax bases of countries like Malta and Mexico, or has he lost his moral compass too?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a438eda352fb430e839b8f3c22425f1f\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! The Hon Bill English\u2014the first part of that question.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f2ec71e43cb04785916f90d8db56ea13\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: Our voice in these discussions is taken seriously because New Zealand has the most comprehensive and thorough tax system in the developed world, with the least loopholes and tax breaks, and, actually, some in New Zealand would argue, the harshest treatment of foreign investors in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002251d85f358cac45998c68d8120546136f\u0022\u003EGrant Robertson\u003C/span\u003E: I seek the leave of the House to table advice from Chapman Tripp from 10 October 2011 that puts New Zealand in the same category as Luxembourg, Ireland, and the Caymans.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e66101b129954909899f57ab98e6f506\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! Leave is sought to table that particular legal advice. Is there any objection? There is objection.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000186\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00227a3f4f3d6d724d44954867a44ccbdd05\u0022\u003EImmigration, Illegal\u2014Overstayers\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00224d83c8a5-2f48-4991-9c45-b1a6060daedd\u0022 data-id=\u00222e58d98b4e09427ba916ad2aa09d2447\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224d83c8a5-2f48-4991-9c45-b1a6060daedd\u0022\u003E10. \u003Cspan class=\u0022HpsByToc\u0022 id=\u00222e58d98b4e09427ba916ad2aa09d2447\u0022\u003EMAUREEN PUGH (National)\u003C/span\u003E to the Minister of Immigration: What recent reports has he seen estimating the fall in the number of overstayers in New Zealand?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u00229aea4a24278642c694b702d1b01ecd20\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229aea4a24278642c694b702d1b01ecd20\u0022\u003EHon MICHAEL WOODHOUSE (Minister of Immigration):\u003C/span\u003E I have received the latest report from Immigration New Zealand, which shows the number of overstayers is now at the lowest level it has been this century.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002232611b79e65e40408b919218547fcf15\u0022\u003ERt Hon Winston Peters\u003C/span\u003E: How many?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002200b6c90f016a42e28ac4a6bf41dcd3bf\u0022\u003EHon MICHAEL WOODHOUSE\u003C/span\u003E: There are now 10,848 overstayers. That is 1,300 fewer than the previous estimate from October 2014. The most remarkable thing about the number of overstayers is it is almost half what it was in 2005, when there were an estimated 20,000 overstayers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224d83c8a5-2f48-4991-9c45-b1a6060daedd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022056da58794d64c179132ba411218b634\u0022\u003EMaureen Pugh\u003C/span\u003E: How much extra has it cost to achieve this reduction in overstayer numbers?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c63d0f44510f41c6964e2d7160acd7e9\u0022\u003EHon MICHAEL WOODHOUSE\u003C/span\u003E: Zero. In fact, the Government is achieving significant savings, with a halving of removal and deportation costs from $3 million 10 years ago to $1.3 million now. This Government\u2019s smarter focus on encouraging overstayers to settle their affairs, pay their own costs for departure, and leave New Zealand voluntarily has contributed to this large decrease. Our policy gives them the opportunity to reset the clock and apply to enter New Zealand legally. Better visa application processes reduce the likelihood of visitors becoming unlawful, further reducing the numbers and costs of overstayers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000193\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022915327a55d92435ea3acb5c3b39e9e59\u0022\u003EBurglaries\u2014Increase and Resolution Rates\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022dbe295ca92494b24a6cb1aaf5a565061\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E11. \u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dbe295ca92494b24a6cb1aaf5a565061\u0022\u003ESTUART NASH (Labour\u2014Napier)\u003C/span\u003E to the Minister of Police: What does she believe are the main contributors to the increase in the number of burglaries and the drop in resolution rates over the past 12 months?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022 data-id=\u0022abe2ba41fc3a4325a500c86687c0f236\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022abe2ba41fc3a4325a500c86687c0f236\u0022\u003EHon JUDITH COLLINS (Minister of Police):\u003C/span\u003E In my opinion, the main contributors to the burglary rates are criminals, their dishonesty, and a lack of deterrents. There is also the added fact that one-third of burglars are aged 16 and under, and 65 percent are aged 24 years and under. There is an element of opportunism as well, and I am advised that in some areas the increase has been seen in the burglary of residential construction sites. As to the second part of the question, the reason, I am advised, for the drop of resolution rates is dependent on factors unique to each district, such as drugs, gangs, youth offenders, and construction.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d65c5ec88e504e0dae8be4f82ea82d6b\u0022\u003EStuart Nash\u003C/span\u003E: If she thinks it is criminals, does she agree with Counties Manukau crime prevention manager Dave Glossop when he blamed the media for the increase in burglaries when he said: \u201CThe media around burglaries has been one of the contributing factors to the increase of burglaries because people think it\u2019s a crime they can get away with.\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022815fbdbf8e144c3c8a9445b333e4ae00\u0022\u003EHon JUDITH COLLINS\u003C/span\u003E: I have learnt that it is never wise to blame the media, even if one\u2019s views are honestly held.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a6e5abfd1f747d583bce714355df48c\u0022\u003EStuart Nash\u003C/span\u003E: Does she think the actual reason that criminals think burglary is a crime they can get away with is that 90 percent of burglaries now go unsolved by police due to under-resourcing; if not, why not?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002278f1a75a35d24574b647f35147bacc8b\u0022\u003EHon JUDITH COLLINS\u003C/span\u003E: That member will be thrilled to know that after only 2 weeks of Operation Resolve, following my firm discussion with the commissioner, 17 arrests have been made in just 2 weeks.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b47415cf143f402d807d400e3b8849fe\u0022\u003EStuart Nash\u003C/span\u003E: Supplementary. [Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d2d42e0b521246a0a56f4f2175c3295b\u0022\u003EMr SPEAKER\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f0921520ecd4b74939197133fdc00bd\u0022\u003EStuart Nash\u003C/span\u003E: Supplementary. [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a602206533454c29891c22636479b961\u0022\u003EMr SPEAKER\u003C/span\u003E: Order! I am just waiting until I get some silence from your colleagues.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224c2ed7345eb44cd1ac7af1b026ea8faa\u0022\u003EStuart Nash\u003C/span\u003E: Why has she dismissed the findings of the recent Police Association survey that found 86 percent of police think the front line is under-resourced, by saying \u201Cthey didn\u2019t actually mean under-resourced\u201D, and does she not think that is a little condescending?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229d02ebbb21cb49749daa4e93f5470526\u0022\u003EHon JUDITH COLLINS\u003C/span\u003E: Oh, I could not possibly compete with the Labour Party for being condescending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000206\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002254a976894a1f4661b7383c98d29f369a\u0022\u003EClimate Change\u2014Sea Level Rise\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022 data-id=\u00229f09385b67a0441a81cce2c81ab983f6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022\u003E12. \u003Cspan class=\u0022HpsByToc\u0022 id=\u00229f09385b67a0441a81cce2c81ab983f6\u0022\u003EEUGENIE SAGE (Green)\u003C/span\u003E to the Minister for Climate Change Issues: Does she agree with the statement made by GNS Senior Scientist Nancy Bertler that sea-level rise of 30cm in 30 years is \u201Cincredibly certain\u201D, and the Parliamentary Commissioner for the Environment\u2019s analysis that a 30cm rise would result in 1 in 100-year high water levels in Wellington happening every year?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022 data-id=\u0022637dc4a4b44a482cb9101997e0a5615f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022637dc4a4b44a482cb9101997e0a5615f\u0022\u003EHon PAULA BENNETT (Minister for Climate Change Issues):\u003C/span\u003E In part, yes, but I would point out that even the Parliamentary Commissioner for the Environment and the scientist mentioned in the question disagree.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fddf0b14ac984c889ef15f8d68280824\u0022\u003EEugenie Sage\u003C/span\u003E: Would she discourage a first-home buyer from taking out a 30-year mortgage today on a home in a low-lying coastal area, given the risks facing such properties over the next 30 years?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022baa770a4074d4269af56e02b1a2954b2\u0022\u003EHon PAULA BENNETT\u003C/span\u003E: It would depend on where it is, what mitigation happens over the next 30 years, and what adaptation local councils are taking responsibility for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5fb432b3e214c8a9c65766176b5fbc3\u0022\u003EEugenie Sage\u003C/span\u003E: Does she believe that councils are giving homebuyers enough information on the effects that rising sea levels may have on future property values in areas like the south coast of Wellington, south Dunedin, and Napier\u2019s low-lying suburbs?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e4c5301dc22f4801a1d4521edc2be00e\u0022\u003EHon PAULA BENNETT\u003C/span\u003E: Not consistently, no. I do not think they are giving enough information.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220ea79655ec344586989b7c3f822753e5\u0022\u003EEugenie Sage\u003C/span\u003E: When rising sea levels cause worse flooding in coastal communities, leaving some homes uninsurable, will the Government be ready and willing to step in and compensate homeowners, as it did with homeowners who were affected in the red zone after the Canterbury earthquakes?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a00de77ab6e4e878fa4189fbb7401b7\u0022\u003EHon PAULA BENNETT\u003C/span\u003E: That is not something that we have been looking at at the moment, so I do not have an answer to it, but it is not in our reckoning. I think we have got a big programme of work to do, particularly after signing the Paris agreement and then working towards what ratification actually looks like, and I am encouraging, really, looking at having a task force that includes business, NGOs, academics, and agriculture, and then bringing the public along as well so that we can seriously look at how we not only meet our obligations as far as the 2030 target but also bend that curve and become more of a lower-emission economy. So that is the target, and I think if we get that sort of stuff right, we can start addressing some of the concerns that the member raises.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e122e0e6-61c6-4d17-9a79-6ad2ac7d127e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d504e12094374bd0856acc62b3961e0f\u0022\u003EEugenie Sage\u003C/span\u003E: What action has she taken, if any, to support her statement that New Zealand needs \u201Ca longer-term, carefully developed plan on the financial implications from rising seas,\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223253101b727d4cf7941dc4b0cb0837eb\u0022\u003EHon PAULA BENNETT\u003C/span\u003E: As I just outlined, I have been meeting with and talking with a lot of different groups, particularly around businesses and NGO groups and others, so I think what our focus needs to be on now is whom do we get together over the next couple of months to then work over a much longer term\u2014and I think beyond 2030\u2014to look at how we lower our emissions in New Zealand. So we are still working out exactly what that looks like and what the right forum is, but we are really keen to see that be an in-depth process that is very transparent and open.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227e22bb95-9afb-449c-bcd2-de9fd4f2277c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224076e8fb803d428093685316bf0873ad\u0022\u003EDavid Seymour\u003C/span\u003E: Does the Minister believe that managing risk from sea level rise is the responsibility of central government, local government, or property owners?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002263776108-58dc-4cab-baf1-95282c61d0de\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223dc9ff98b43b4d099847ec6c1810f47d\u0022\u003EHon PAULA BENNETT\u003C/span\u003E: In some contexts, all of the above.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000219\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u00220aab4a81ee904f94baba52ac7cc1d52a\u0022\u003EUrgent Debates Declined\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000220\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022070f79687ab24dd48f0f8c5a0e2b6f3c\u0022\u003EOverseas Trusts Review\u2014Appointment of John Shewan\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022 data-id=\u0022f184b583e8b849ae8c60cb308b1cbbca\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f184b583e8b849ae8c60cb308b1cbbca\u0022\u003EMr SPEAKER\u003C/span\u003E: I have received a letter from Andrew Little seeking to debate under Standing Order 389 the Government\u2019s decision to appoint John Shewan to investigate the revelations from the Panama Papers. The Government\u2019s appointment of a person to conduct some inquiry is a particular case of recent occurrence involving ministerial responsibility. The test for whether a particular case requires the immediate attention of the House is a high one. Not every ministerial announcement of an appointment will give sufficient grounds for an urgent debate to be held. There must be an element of urgency or substantive policy change for the matter to take precedence over other business. I am not convinced that the appointment of a person to conduct an inquiry warrants an urgent debate. The application is therefore declined.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000222\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022da66f99a0c2140d8b1a81c76f081cd68\u0022\u003ETaxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000223\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022200c2cd36c264a67a83495f16e3575f2\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000224\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00221d9e6449f76a4508931f7b27c076840f\u0022\u003EPart 1  Amendments to Student Loan Scheme Act 2011\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022897285ac262a4c8299f6682c132b40a5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022897285ac262a4c8299f6682c132b40a5\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E This is a reasonably complex bill. It deals with a number of issues that the Labour Party feels quite strongly about. In Part 1 we are talking about the Student Loan Scheme Act 2011, but we are also going to be debating, in other parts, Income Tax Act changes, Goods and Services Tax Act changes, Tax Administration Act changes, as well as the title and commencement clauses. As mentioned, there are a number of Labour speakers who, I know, will take calls on this technical bill because there are quite a lot of clauses and quite a lot of concepts that do need explaining. The reason for this is there is quite a lot of relevance in this bill that impacts upon others outside the stock-standard tax practitioner bracket. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat I would like to talk about, first and foremost, is charities. The issue we are trying to solve here in Part 1 is that often what happens with students is they head off on an OE. They have finished their studies, they have a student loan, but under the Student Loan Scheme Act if a student with a student loan heads overseas, they must pay interest on that student loan. But what is allowed to happen is if a student is working for a registered charity for a maximum time of 24 months, then they are classed as still being domiciled in New Zealand. So even though they may head off, they do not have to pay interest on their student loan. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe problem we are trying to solve is that under the current law charitable organisations must be approved by Cabinet for the purpose of the student loan scheme interest write-off and listed in regulations. What can happen with this is by the time that goes through the approval process, the student is overseas, they have already accrued a whole lot of interest on their loan, and they do not get full benefit. So what this bill does is it basically removes the need for Cabinet to approve a charity. What I will say, which is quite interesting, is that the level of disclosure required under this bill by the commissioner for charities is quite unusual compared with other pieces of legislation on the statute book when it comes to tax law.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227af7f1ae3fc84d7cab01e3512f41a6b9\u0022\u003EGrant Robertson\u003C/span\u003E: Oh, well done.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c2b09f2bc76c4fa882752c2d120fda02\u0022\u003ESTUART NASH\u003C/span\u003E: I know. For example, when I compare new sections 27A, 27B, 27C, 27D, and 27E, inserted by clause 7\u2014this basically relates to what the commissioner\u2019s responsibilities are with regard to listing charities, what qualifies as a charity, whether the commissioner can delist a charity, etc., etc. The regulations are quite prescriptive, and the level of disclosure is quite onerous. In fact, I suspect that if we were to compare this bill with other pieces of tax legislation, like, for example, the legislation governing overseas trusts\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002257e87cb01d404163b4f5b2f58f112fa0\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Do not go there\u2014stick to Part 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b1c24936b7ac4f19a44974edfbdae3c1\u0022\u003ESTUART NASH\u003C/span\u003E: Absolutely, Mr Chair, but what I am saying is that I think this is very good, because what this is doing is requiring a level of disclosure that meets the expectations of the general public of New Zealand. We like to know, with our tax law, that there is a level of transparency that cannot be overridden or abused in any way, shape, or form. This is what this does. Like I said, what it does is it takes the onus from Cabinet and gives it to the commissioner. For example, new section 27B prescribes the primary matters in which the commissioner must be satisfied for listing a charity, and that goes into quite a level of depth around charity law, etc., etc. There are a whole lot of requirements that must be met before an entity is listed as a charity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ENew section 27C is about an application by an entity to be listed as a charity, so there is a process that every entity must go through before it seeks the listing, which, again, is very transparent. It is out there so that organisations are left in no doubt as to what they must do. But having said that, there is also, in clause 7, new section 27D, which says the commissioner may list a charity for tax purposes even if no application has been made or if, in fact, the commissioner requires more information. What this means is that a student traveling overseas to work for a charitable organisation will not be disadvantaged if that organisation has, at the point of registration or application, met all the requirements. There are a number of clauses in here that I will talk on at a much greater level of depth, but I thought that this is important first and foremost, because I know\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022 data-id=\u002204a886faad1b4ed1901139f7274a019a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002204a886faad1b4ed1901139f7274a019a\u0022\u003EFLETCHER TABUTEAU (NZ First):\u003C/span\u003E Thank you, Mr Chair. Thank you for this opportunity to stand up on behalf of New Zealand First in relation to this taxation legislation. I wanted to touch on just a few things that, coincidentally, have already been raised, and just reaffirm some of the words that have been spoken already in the Chamber. This is a highly complex bill, and a number of the pieces of legislation that are being altered are significant and quite varied. It is important that we get this opportunity to come back and touch on each and every one of them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EI first of all want to add New Zealand First\u2019s voice to the charity discussion. The intent there is to ensure that a student is recognised as still being domiciled in New Zealand for the purposes of repayments, in terms of their student loan. We acknowledge that this is the right and fair thing to do, but in reference to new section 27A, inserted by clause 7, \u201C(1) The Commissioner must keep a list of entities that are charities for the purposes of section 25(1)(b). (2) The list must specify\u201D\u2014I will not go and read all of that out, because I think there seems to be a consensus already that the specificity is quite detailed. In fact, there should be greater debate, and perhaps a question for the Minister in the chair, Michael Woodhouse, about the level of obligation for charities in terms of declaring of information, because, I would suggest, we may have gone too far in terms of the charity\u2019s obligations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EAlso, new section 27E\u2014are there currently entities\u2014oh yes, I have a question to the Minister. New section 27E, inserted by clause 7, is quite specific. It says that entities listed under the Act as charities do not meet the criteria set out section 27B. The question is, are there entities listed under this charities component of the legislation that do not actually meet the current criteria? If that is the case, then does the commissioner now have an arbitrary right to delist them from that charities list? It is a fair question, a reasonable question, and something that we would like clarity on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EThen, if you actually move on to new section 176A, inserted by clause 23, the level of disclosure goes quite far. What the question is, in new section 176A, is a question around the charity being able to contest the decision of the commissioner around the charity listing in the legislation. It says the entity can contest the decision if it believes it \u201Cis not fair and reasonable;\u201D. My question to the Minister is\u2014new section 27B sets out a very clear and straightforward list of the definitions in terms of requirements for defining what a charity is, so what is the opportunity there for entities to say what is not fair and reasonable about the decision? It is legislative\u2014it is a tick in the box. There is no debate involved in it; they are either a charity under the Act, or they are not. It is just a matter of confusing the issue there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EIf I could take the Committee\u2019s attention to new section 209A, inserted by clause 26, \u201CDisclosure of information to Australian Taxation Office in relation to borrowers who are, or may be, overseas-based\u201D. New Zealand First looked at this part of the legislation and said that, actually, that is quite reasonable. We are very clear on our expectations for New Zealanders in terms of paying back their debts and their obligations in terms of borrowed money. When we looked at the legislation, we said: \u201CWell, it makes sense that New Zealanders overseas should be required to do the same thing.\u201D, and so we ran into the issue about information sharing. The solution in new section 209A(1) is to \u201C(a) obtain or verify contact details of borrowers who are, or may be, overseas-based; and (b) administer the student loan scheme in relation to those borrowers. (2) For those purposes, the Commissioner may provide the information set out \u2026\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EAgain, the level of detail there is quite high, but I just want to take this opportunity to make a contrast, because we have current issues in front of the House at the moment where we look at the clear ability for two Governments to come together, talk very clearly with one another on information sharing, data sharing, contacting individuals\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u0022a0244e6d0e1e4030a999427e009a6329\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a0244e6d0e1e4030a999427e009a6329\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E Thank you, Mr Chair, for the call\u2014that is terrific. I also want to talk about clause 26 within Part 1, which relates to the new provisions on disclosure of information, in this case to the Australian Taxation Office. By way of background, what is happening here is that, effectively, New Zealand has a new arrangement for the exchange of information regarding student loans, which was signed between the Australian Commissioner of Taxation and the New Zealand Commissioner of Inland Revenue in March 2015. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis sits alongside a range of provisions in New Zealand law to exchange information with other taxation jurisdictions; for instance, double taxation agreements that we have with Australia and with around, I think, 40 other countries; and also what is called\u2014as this is\u2014a taxation information exchange agreement, which we currently hold with 11 countries. It is not 12 countries. Malta is not on the list of countries with which we have a tax information exchange agreement, despite what the Prime Minister told the House last week when he stood up and said that we did have a tax information exchange agreement with Malta\u2014we do not. He has not come to\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002211d71b4b9e3c4f20889ed9b56df87a43\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: We are talking student loans here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002232dfe3a74f094688abd19289642b1e5f\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: I raise a point of order, Mr Chairperson. We are indeed, and what we are specifically talking about, if I refer to the commentary on the bill provided to us by the Minister, is an \u201CArrangement for the Exchange of Information\u201D\u2014those words all have capital letters on them. I am currently working through the arrangements for information exchange that are in the call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002261d33333ffb547d79a0378636a79ae8e\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Taking the member\u2019s point of order, what we are talking about\u2014and I refer specifically to the clause that he is talking about\u2014is the disclosure of information with the Australia Taxation Office. If he wants to make some side reference, then he has done that, and he should move on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229d8c495e4f464def801be3874c089f19\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Thank you, Mr Chair. So, as I was saying, it says in new section 209A(1): \u201CThe purpose of this section is to facilitate the exchange of information between the Inland Revenue Department and the Australian Taxation Office\u201D. What I was pointing out was that we have a double taxation agreement with Australia. This taxation information exchange agreement is an additional agreement. I was just making the point that we do not have one of those with Malta and I am waiting for the Prime Minister to correct that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe reason that we have this clause in here is to enable a much clearer line of communication between our Inland Revenue Department and the Australian Taxation Office. There are certain details that are now required to be exchanged. Those details in new section 209A(3) include: \u201C(a) a borrower\u2019s name or any other name by which a borrower is known: (b) a borrower\u2019s date of birth: (c) a borrower\u2019s tax file number: (d) a borrower\u2019s last known address and contact details: (e) any other information that the Commissioner considers relevant for the purposes referred to in subsection (1)(a) and (b).\u201D That is quite a comprehensive set of details about student loan borrowers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e09badca92dc4caab15b52b1e5cbe2f0\u0022\u003EDr David Clark\u003C/span\u003E: And we know who the beneficiary is.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b3b888a84f9d452c8ddebd959fb14585\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Indeed. In fact, the first one is well worth going into a little further\u2014\u201Ca borrower\u2019s name or any other name by which a borrower is known\u201D. That is actually a comprehensive way of identifying who a student loan borrower is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIf we compare that with other disclosure arrangements that the Inland Revenue Department has\u2014in fact, I will put the question to the Minister of Revenue as to whether he would like to compare that and see whether he thinks there is fairness here for student loans borrowers, versus, for instance, those who run a foreign trust in New Zealand who actually can get away without even saying what the name of the trust is, because if you do not know what the name of the trust is, you do not even have to put it in the form. No. You have just got to describe it; you do not actually have to put the name in it. So a question for the Minister is whether he thinks it is fair that student loans borrowers have this obligation but those people who want to avoid paying their tax elsewhere in the world do not even have to put the name of their trust down. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe can say the same thing here about the extent of these disclosure arrangements, because there is no doubt in this\u2014there is no \u201Cmight\u201D or \u201Cif\u201D. Information has to be collected and available and shared. It is that sharing that is the essence of this clause. It is not just about making sure that a student loan borrower keeps that information, because if we were comparing this with other disclosure arrangements in tax law, the person who is a settlor of a foreign trust in New Zealand just has to keep the information. They do not have to share it with anybody; they do not actually have to make it available; they just have to keep it. I wonder whether the Minister would like to tell us whether that is fair. If student loan borrowers have to meet their repayment obligations\u2014and I think everybody in this Chamber acknowledges they should, because that is an important part of having taken out a loan\u2014why are those sorts of obligations not on other types of people who interact with the Inland Revenue Department? I would like to hear the Minister justify some of those concerns.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u0022113dadd223344e42b80c5f236b33ad1d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022113dadd223344e42b80c5f236b33ad1d\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E It is a great pleasure to talk on the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. We are talking about the student loan scheme portion of the bill, which is actually the smaller part of the bill. The bigger parts, which we will come back to, will be around other areas of the bill\u2014the residential withholding tax and also the GST amendments\u2014which probably will be more helpful for that last speaker, Grant Robertson, because he will actually be able to speak on the bill, rather than to wander off and try to make political statements that are completely irrelevant to the actual bill that he is talking about.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a10e59dbdb8e4129b2cba53ee597de02\u0022\u003EDr David Clark\u003C/span\u003E: Don\u2019t question the Speaker\u2019s judgment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a29c71dc62b64d62b1b386728c5b91ef\u0022\u003EDAVID BENNETT\u003C/span\u003E: Oh, the Speaker made no judgment, Mr Clark\u2014the only judgment is your judgment in your leadership, so I would not be yelling out too much.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227e9217499a77426382335e21cbcd220c\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ebb6babcb0f54c6a955ed4b2e3bd1b8e\u0022\u003EDAVID BENNETT\u003C/span\u003E: When we look at the student loan scheme amendments section of the bill\u2014this is the important part of it; not as important as the other two parts but still important. Most student loan borrowers do the right thing and they repay the amounts on their student loans.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228121df8d099247e1b087e66a0f9cd4b1\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Did you pay yours back?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227131b520c4c54a3d94567597da7d8aae\u0022\u003EDAVID BENNETT\u003C/span\u003E: What is that, Mr Cosgrove? Well, he will be paying back his soon\u2014when he has to go and get a real job and do some real work other than working for the Labour Party. Most student loan borrowers repay their loans, but when we have borrowers overseas we have a lower rate of compliance and so there is a lower rate of return to the New Zealand Government from overseas-domiciled New Zealand borrowers of student loans. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EBasically, over the last few years you have seen some legislation in this area to try to claw back some of that student loan from borrowers who are overseas and to make sure that we get a better repayment from New Zealanders who have taken advantage of our education system and got a good education, have gone overseas and got a good job, and have not paid back their student loan to the extent that those who have been living in New Zealand have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThis bill contains further amendments in that area, notably around the arrangement of exchange of information regarding New Zealand student loans with our Australian counterparts\u2014that is, the Commissioner of Taxation in Australia and the Commissioner of Inland Revenue in New Zealand. Basically, there will be a greater exchange of information. Many New Zealanders who study and then go overseas do go to Australia to work, so that is one thing: there is a higher preponderance of people who have not paid back their student loans who are in Australia, compared with other countries. This exchange of information will allow the Inland Revenue Department to receive up-to-date contact details for New Zealand student loan borrowers living in Australia through matching borrower details against the Australian Taxation Office records of Australian taxpayers. It is important for New Zealand\u2019s tax base that we have that information and, therefore, we can go further in seeking repayment of those loans. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThe bill also has a few smaller things in it around delegation of authority for charitable purposes, to acknowledge that some organisations that borrowers may be working for are charitable. Basically, there are situations where borrowers may volunteer and go to work overseas. They are treated as if they were physically present in New Zealand so they do not have to pay interest on their student loans, whereas if they had been treated as being overseas working for a voluntary organisation, they could have then been seen as having to pay interest on their student loans. So, taking into account those New Zealanders who make a contribution to the world through the volunteer work that they do, we are making it easier for the student loan legislation to be more efficient in how it impacts on those members of our community. The student loan scheme changes will apply from enactment of this bill, so that will enable us to have that sharing of information with the Australian Taxation Office immediately. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThis is not the most complicated part of the bill, or the most debated part of the bill\u2014you will see that more around the residential land withholding tax; I am sure that there will be more opinions on that area, and also in regard to the GST on online services\u2014but it is part of this bill, it is part of that work around student loans to enable New Zealand to get the best return that we can for those people who have borrowed and have gone overseas, and are getting the benefit of the student loan, especially in the Australian context. Thank you very much. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022ee3e510b728941bbacf568718f1bb177\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ee3e510b728941bbacf568718f1bb177\u0022\u003EHon CLAYTON COSGROVE (Labour):\u003C/span\u003E Who needs John Shewan when we have that member, David Bennett? The Government could have saved a lot of money by having a special inquiry appointing that member as an absolute expert on all things in respect of taxation. But I will move on from his fiscal prowess.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere is an old adage in respect of tax that for a tax system to be credible with users it has to be simple, it has to be transparent, and it has to be consistent\u2014consistent. Looking at new section 209A, inserted by clause 26 of the bill, and the other provisions around student loans, I want to ask the Minister in the chair, Michael Woodhouse, a question in a comparable sense. We have taxation agreements with Australia in respect of liable-parent contributions. I do not want to track into that too much, but I want to ask him a question around the inquiries that he may well have made of our Australian counterparts in respect of their robustness in doing their part of the deal in terms of the collection of student loans. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIn my experience, having represented some constituents over the years, when it comes to liable-parent contributions there is always an argument that is made that when you go to the Australian side of the coin\u2014the Australian inland revenue service, the Australian Taxation Office\u2014they have got a bit of an attitude that says \u201CWe\u2019ll get to that when we can\u201D, whereas our Inland Revenue Department, in terms of policing, on our side of the fence in respect of Australians, tends to be a little more vigorous in terms of meeting our obligations with our Australian cousins. But it has been said by many a constituent that when they are trying to deal with their liable-parent contributions, and representations are made to the Australian Taxation Office, it does not prioritise this in a great way\u2014it gets to it when it can, as per its other work. I am being colloquial, but that is the feedback that comes through from people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI suppose my question to the Minister is: have there been any representations made to the Australian Taxation Office in terms of what priority it will give, in the collection of student loans and information sharing, to doing its half of the work, if you like, in its jurisdiction? I think that is a fair question to ask, and I look forward to an answer. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EAs I said\u2014and I know the previous speaker, David Bennett, did not touch on these issues\u2014fundamentally, there needs to be consistency within a tax framework. Simplicity and transparency: they are the fundamental tenets for the tax system to gain credibility with those who use it. It is worth making the comparison, as Mr Robertson did, with the level of detail that is required to be disclosed to the Australian Taxation Office in respect of new section 209A(1), (2), and (3), where we are talking about the borrower\u2019s name\u2014or any other name they may have been known by\u2014date of birth, tax file number, and last known address and contact details. You are almost asking for the borrower\u2019s shoe size, with the length and depth of information that is required to be disclosed and passed on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EMany would argue that that is fair enough. Like many members of this House, many moons ago, before I came in here, I had a student loan. I was lucky enough to get a decent job and pay it back, and I think most students, just like most taxpayers, would argue that they should meet their obligations. Many struggle because of the nature of the income\u2014or lack of it\u2014that they get, but I think most fair-minded Kiwis would say that they will meet their obligations. However, if you compare the depth and detail in the requirements under new section 209A with other parts of the tax system\u2014the policing of foreign trusts, for instance, but I know that is a quarantined subject. It has had razor wire put around it in this House; we are not allowed to talk about it. Somehow it is like some disease that has come in here that has infected the place, but we have got to pretend that it does not exist. What is it? Suspension of disbelief, I think is the technical term that people use from time to time. If you compare the requirements on a student with the requirements on those who use foreign trusts within a jurisdiction, you have got to ask: does this bill and does that matter, though it is secondary to this discussion, meet the test of a consistent, transparent, simply-put-together tax system and tax framework? I ask the Minister whether he could provide us with some information on that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere seems to be a gross inconsistency. No one is arguing that the requirements in new section 209A, inserted by clause 26, are not required or are onerous or are too tough. What people are asking the Minister of Revenue is whether he still agrees with the tenet that a tax system should be transparent and consistent.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022 data-id=\u0022cdf058369a694ec4a9e11dcdc38a67d8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cdf058369a694ec4a9e11dcdc38a67d8\u0022\u003EDr DAVID CLARK (Labour\u2014Dunedin North):\u003C/span\u003E I want to pick up where my colleague Grant Robertson\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267cd6bcc4fb04292a3271194b7868842\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: As opposed to repeat it, you are just going to pick it up, are you?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d35562b91a934e5baecc41cb31c0b920\u0022\u003EDr DAVID CLARK\u003C/span\u003E: Yes, pick it up, Mr Chairperson. The clause 26 references that my colleague referred to, and I trust he may speak further on this, lead into other important aspects of the student loans aspect of this bill. As we have canvassed, we are required, under this part of the bill, to record a borrower\u2019s name or any other name by which the borrower is known, a borrower\u2019s date of birth, a borrower\u2019s tax file number, a borrower\u2019s last known address and contact details, and any other relevant information.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022654b4a37e1154c05b7034249ee29bb01\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: You are the third speaker to debate this issue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c00c18e47e764e76ae2111dbfa6b020a\u0022\u003EDr DAVID CLARK\u003C/span\u003E: That is not the end of the matter; that is the precursor. That information then goes on, through to other parts of the bill, and is required as background for a number of other calculations that we find in subsequent clauses. That very information is used as background to inform calculations that say that the borrower must pay tax equal to the larger of two amounts, and those two amounts are calculated using various formulae. In clause 30, to do with shareholders in close companies, we have a calculation of the amount of earnings they might have, as compared with ordinary earnings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThat is a level of detail into which the bill delves. In new clause 11 of schedule 3, inserted by clause 30, there are requirements for borrowers who are settlors of trusts. We read that \u201CThis clause applies for the purpose of determining the amount that is included in the adjusted net income of a borrower for an income year when the borrower is the settlor of a trust (the borrower\u2019s trust) \u2026\u201D. That amount is calculated, again using a calculation in subclause (4) of new clause 11: \u201C(a \u002B b) \u00F7 c\u201D. Again, it is of the nature of where the income is either greater than zero or, calculated by this trust, greater again\u2014so we have there calculations that build upon the information collected earlier, in order to ensure that the borrowers pay their fair share. That is what it boils down to, in plain language. It is about making sure the borrowers have complete transparency in the calculations that are made, and that it is then calculated in terms of their fair share, built upon what they earn via their various means or where their income sources come from. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThat is sensible. Nobody here, I think, will dispute that. But until we had these Panama Papers, there was a saying that there are two things in life that are certain: death and something else that they seem to have forgotten on that side of the Chamber. It was about collecting taxes. Now we have a debate in this Committee about exactly whether these clauses should apply and how. We delve into the detail, and we see that the principle underlying it is about making sure people pay their fair share according to the various interests they have. These interests are disclosed and known to the tax department, because there is a high burden of proof on the taxpayer to declare all of their information, including things such as other names and other relevant information, which is a catch-all clause. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThat feeds through, in fact, into all of these subsequent clauses in the pages that follow. Those calculations add up to, in many cases, a greater amount than were the borrower simply a borrower simple, with no other business interests, with no trusts that they were the settlor for, with no close companies that they were responsible for, and so on. That is how the calculation is made. Were it the case that these people had foreign trusts, where their interests were not disclosed, that would not be captured in these clauses unless it was captured under \u201Cother relevant information\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThat is why, in this bill, I commend the fact\u2014and I am sure my colleagues will too\u2014that we are collecting this wider set of information. It is a good principle of tax law to collect all relevant information, to ensure that people pay back their fair share. I have been a student loan borrower, as many others in this House will have been, and I have not resented the fact that I had to pay that loan back. That is something that, in my time, was the expectation that I went in with. I do think that over time\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022 data-id=\u0022431b27156e3c499dab9f3c90575dbbe5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022431b27156e3c499dab9f3c90575dbbe5\u0022\u003EJULIE ANNE GENTER (Green):\u003C/span\u003E I rise to speak on Part 1 of the bill. I note that this part of the bill is the most problematic for the Green Party. This is what I raised during my second reading speech. On the one hand, we support the changes that mean that student loan borrowers who are working overseas for approved charitable organisations and for approved aid activities as volunteers are entitled to be treated as if they were physically present in New Zealand, and as such they are not charged interest on their student loans for a maximum of 2 years. We thought that that makes sense, and it is good that we are making it easier for borrowers who are working for charitable organisations to have that recognised so that they receive the benefit that they are entitled to\u2014an interest holiday, if you will. But overall the Green Party has great concerns about the student loan scheme generally. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EI suppose it goes to the overall priority about whether or not it is important to prioritise the opportunity for education for people, without loading them up with a whole lot of debt. For the Green Party, it would be a priority for us, in order to create a knowledge-based economy, a clean, green economy, all of that, to ensure that we are investing in our people and giving them opportunities. We are not really giving them opportunities when, at the same time, we are offering them an education but loading them up with debt. But I would say that\u2014as many of my colleagues have referred to in Part 1 of this bill\u2014in terms of the aspects, the changes, to the student loan scheme, on the one hand although overall we would question whether or not it should be a priority for the Government to ensure that students are paying for their education as opposed to the wider society, which is going to benefit from that, the principle of information sharing for the purposes of ensuring that, say, taxes are paid when they should be is really important. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003ESo I can understand this principle of information sharing, and we thought it was a good thing in the bill that in clause 26 there is this full disclosure of information to the Australian Taxation Office and that a whole lot of information is provided so that people who have taken on student loans under the scheme\u2014even though the Green Party does not fully agree with that scheme, we want to ensure that the borrowers are paying it back. It might be $600 million or $800 million that is owing in student loans according to the regulatory impact statement, which estimated it was something in the order of $600 million to $800 million for people living overseas who have not been paying back their student loans. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EOne of the ways that we resolve this is through information sharing and understanding exactly who the borrower is, what their name is, their date of birth\u2014all this information. That seems perfectly reasonable. But in the context of things, the amount that is owing is quite small relative to the amount that we might be missing out on tax that is not being paid by multinationals, for example, that are avoiding paying tax in New Zealand. The amount that we are missing out on there\u2014between $500 million to $1 billion, possibly more\u2014is considerable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003ESo we have the resources of the Government being put to chasing down people with student loans rather than focusing on much greater amounts of money that we are missing out on, on tax from multinational corporations that are not paying their fair share here. At the same time we are going through this process to do this information sharing with Australia and to gather all of this information about the borrowers and yet when it comes to foreign trusts in New Zealand we do not request any of that information.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EWe do not make it possible for our partners in the world\u2014other countries that are partners in double tax agreements. Even they cannot request information about very, very wealthy people who might be using New Zealand foreign trusts to avoid paying tax in their home country. Virtually the only country that could request that sort of information is Australia, and that is only because it complained to the New Zealand Government in 2006 because it knew that wealthy Australians were using New Zealand as a tax haven to avoid paying tax. Since we do not have that sort of agreement with other countries, they are not able to request this information. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EStrangely, when we proposed in the House last week to the Prime Minister that it might be good to have a register with more information about the settlors of these trusts, so that other countries could request information from us and ensure that New Zealand foreign trusts were not being used to dodge tax\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022 data-id=\u002267008007c8bb43e1becce505116b570a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002267008007c8bb43e1becce505116b570a\u0022\u003EKRIS FAAFOI (Labour\u2014Mana):\u003C/span\u003E Thank you very much, Mr Chair, for the opportunity to speak to Part 1, which amends the Student Loans Scheme Act 2011. I want to concentrate my contribution, in the first instance, to clause 17, which replaces section 114 of the principal Act. The original section was titled \u201CNotification of worldwide income by New Zealand-based non-resident borrowers\u201D. It sounds technical, but I will get to the point soon.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a467c670df64ca5afc9a6e64cee8bb9\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Good.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264e79f99e71546e0bdd2bbc2cce2d932\u0022\u003EKRIS FAAFOI\u003C/span\u003E: Thank you, Mr Chair. There has been an argument made on this side of the Committee around the principles around a fair taxation system and around the obligations that people who have taken out student loans and have potentially moved overseas have to meet in order to pay their fair share\u2014to repay their student loans back. We want to make sure there is consistency within this piece of legislation and with the taxation system as a whole. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EClause 17, which replaces section 144, talks about worldwide income by New Zealand - based non-residents. New section 114(1) states: \u201CThis section applies to a New Zealand-based borrower who is a non-resident and who has Schedule 3 adjustments.\u201D I have gone to schedule 3 of the principal Act to see what it might entail if there was a schedule 3 adjustment. In clause 30 of the bill, clause 11 of the replacement schedule 3 talks about borrowers who are settlors of trusts. It goes on to say, in clause 11(2), that schedule 3 does not apply if a trustee of the borrower\u2019s trust is registered to a charitable entity. I think that many speakers have spoken about that\u2014that the borrower\u2019s trust is solely for the benefit of the local authority. I can understand that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EBut clause 11(3) of schedule 3 goes on to a very complicated\u2014well, not too complicated\u2014formula to ascertain the adjustment within schedule 3 to the New Zealand - based non-resident\u2019s payments in a specific year. The rough calculation is (a \u002B b) \u00F7 c\u2014I do not want to bore people at home with the detail, but I have to because this is the Committee stage\u2014\u201C\u2026 where\u2014a is the net income of the trustee of the borrower\u2019s trust for the income year reduced, to not less than zero, by the amount of the trustee\u2019s income that vests or is paid by the trustee as beneficiary income for the income year\u201D; and b is \u201Cthe greater of zero and the total of amounts calculated in accordance with subclause (4) for each company in which the trustee of the borrower\u2019s trust and associated persons hold voting interests of 50% or more on the last day of the company\u2019s income year\u201D; and c is \u201Cthe number of settlors of the borrower\u2019s trust who are alive at any time in the income year, including the borrower, to which this clause applies.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EMy point is that that is a hang of a lot of information. I do not entirely understand it all, but it is a lot of information to disclose, for a New Zealander who has got their interests in a trust, who has obligations back to the New Zealand people to pay back money that they have borrowed in order to study. It is a lot of information. We have been talking about the principle of consistency around the obligation to make sure you pay your fair share of income tax, and I think there is an inconsistency here about the information that is demanded from someone who is a New Zealander resident overseas who has a trust and has an obligation to pay back to the State their student loan, based on what they are earning, and, let us say, a foreign trust where these people have come from overseas, set up a trust, and all we demand from them is a name. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThere may be a theme developing here but I think this is one instance, in clause 17, where we must take a principled approach to taxation. If we are demanding information of the complicated nature that we have within schedule 3, under new section 114, which is in clause 17 and within this bill, why have we not got that same consistency in terms of demanding information from those who hold foreign trusts in New Zealand? That is a question that I would like to pose to the Minister in the chair, the Hon Craig Foss. Why is the Government not taking that move for consistency? Why is there not the consistency? I know that it might be a bit complicated for the Government. It might be too complicated for the Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u00225bd8a35093864f9abc99811e10a5f3fe\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225bd8a35093864f9abc99811e10a5f3fe\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E It is opportune, because I also want to pick up and develop the ideas that the previous speaker, Kris Faafoi, was working on, in particular looking at\u2014I can see how pleased you are about that, Mr Chair; it is great to have your endorsement\u2014the amendments to schedule 3. I am looking here at clause 11\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ea49f106a7349d49ec14b0cc9101a4e\u0022\u003EDr David Clark\u003C/span\u003E: I want to hear from the Minister.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b24aece0bc11451795e001cecfdc6b6d\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Oh no, I am coming to that. Clause 11 of schedule 3, inserted by clause 30 of the bill, is titled \u201CBorrowers who are settlors of trusts\u201D. It is very important to go back and recognise that all of the amendments in Part 1 of the bill relate to borrowers\u2014or the vast majority of them\u2014who are offshore. So this is when you are in Australia and you still owe the money but you\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f58a9222df542c1a6286f9f1f69ce37\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Student loan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225011008d5f0b4709a0d5b6075ad457d2\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Student loans\u2014that is right; student loan borrowers offshore. But in this case we are talking about borrowers who are the settlors of trusts. That is the heading in clause 11\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c70c3ba397cb403c96279bb9214fa59e\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Student loan borrowers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222ea3e01cdaba462a95eb46092847e2fe\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: This is an interesting conversation we are having here, but, yes, I think we are on the same page metaphorically and literally. So, as my colleague has mentioned, there is an expectation inherent in this clause that we know the income that the borrower is getting from the trust. That is actually what the clause is based on, and the formula that my colleague mentioned, in clause 11(4) and (5) of schedule 3, are generated by knowing the income of the trust. That is, essentially, what lies at the heart of this clause. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThat would be right if you were a New Zealand resident borrower, because if you are a New Zealand resident borrower and you have a trust, you have income tax obligations, but not if you are not in New Zealand\u2014not if you are not a New Zealander. Changes that have been made in recent years mean that if it is a trust where those who set it up are not New Zealand residents they have no income tax obligations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022683f171a063f4cdda6670646b07bfcbb\u0022\u003EDr David Clark\u003C/span\u003E: None.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a8900a52943f45178de97046a7bbdb0b\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Whatsoever. So here we are with student loan borrowers who are the settlors of trusts and have a string of obligations put upon them, which we can enforce\u2014which the Inland Revenue Department can enforce\u2014because it knows the income that that trust is generating. A tax return is returned, and then we can judge from that how much the borrower\u2014the student loan borrower, Mr Chair\u2014would be paying back. That is a fair system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EContrast that with the information that we have about other types of trusts: foreign trusts, where there is no information like that that could even be used to work out whether or not somebody owes money. Once again we have our concern on this side of the Chamber about the absence of the critical element of a taxation system: fair treatment. New Zealanders should be proud, in general, of our tax system. It actually is robust, and it does work well. But where deliberate decisions are made, as they were in a tax bill that went through this Committee in 2010, to create loopholes through which we could, for instance, zero-rate a managed fund, we then create the opportunity for that to be exploited\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ce0f92093d6444adb25eb4164d984a68\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d97be2f21c3d4696bb031858dc783e88\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: \u2014and unfairness to join in our system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EMy question for the Minister in this regard is somewhat technical, but it is relevant: at what point does somebody become a non-resident for tax purposes? If the issue that we know of, in terms of the setting up of trusts, is that if you are not a resident that is where you can exploit the loophole, how long would a borrower who is the settlor of a trust need to be away from New Zealand to no longer be considered a resident? This is a serious question, because we are dealing within clause 11 of schedule 3 here with exactly that kind of person: a person who has been in New Zealand\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b8df63d51300435aa6a8ea032aeba244\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Who is a student loan borrower.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022083a425975614bef8d31e244e18c56fd\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: That is correct, but in this case, it is a student loan borrower who is the settlor of a trust. I am pretty sure we are still on the same page. At what point after they have been away is that student loan borrower no longer considered a resident for tax purposes? This matters when it comes to the question of their obligations as a settlor of a trust, because we know those obligations are, in fact, different depending on whether or not you are a resident or a non-resident in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAgain, it is a question of basic fairness, and the reason I am raising it with the Minister is that we do now know that a lot of young New Zealanders are spending longer away, having graduated from university with a student loan. Should they have structured their affairs in such a way that they are the settlor of a trust, can the identity of that trust change over time so that it, effectively, becomes a non-resident\u2019s trust and therefore no longer subject to these obligations?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00223dda1d06b6e74df5b6fed1f9ae5e7a8d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223dda1d06b6e74df5b6fed1f9ae5e7a8d\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E I would like to talk about clauses 26 and 73. This is about the disclosure of information to the Australian Tax Office about borrowers who are, or may be, overseas-based. The issue this is trying to solve is one of the key problems in collecting overseas student loan payments: holding up-to-date contact information for defaulters. You know, if you cannot get hold of them, then how can you liaise with them or correspond with them? Many of them are believed to live in Australia, and what this will allow is the exchange of information, as has been talked about, between the Inland Revenue Department (IRD) and the Australian Taxation Office to receive up-to-date contact details of New Zealand student loan borrowers residing in Australia through matching details against the Australian Taxation Office\u2019s database of Australian taxpayers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat this will allow the IRD to do is to contact those individuals and keep them engaged with their student loan obligations and, where appropriate, recover outstanding student loan repayment amounts. The thing we cannot forget when we are talking about student loan borrowers and, even more, about student loan defaulters is that when a New Zealander has signed a contract with the Government to undertake a student loan it is a legally binding agreement and they must abide by the terms. I think it is just incorrigible that someone may head across to Australia to avoid paying off their student loan after, arguably, drawing the benefits of that loan in order to get educated or do whatever people do with student loans. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe thing about this, and this is where it is quite clear, is that an amendment to the Tax Administration Act 1994 creates an exception to the taxation secrecy provisions. The one thing that the IRD values more than anything\u2014what its whole integrity is based upon\u2014is, in fact, maintaining the secrecy of individual taxpayers, so no one knows what anyone else is doing. My personal view is that the IRD does act with complete integrity in this instance. It has a number of clauses and terms and conditions and individual employment contracts that ensure that all staff members know that they have to maintain the integrity and the secrecy of each taxpayer. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESo the interesting thing about clause 26 is that it limits who in the Australian Taxation Office is authorised to receive the information from the Commissioner of Inland Revenue. Again, this just maintains the integrity of the tax system. But it also prescribes the information that may be provided by the commissioner and says that the information must be relevant for the purpose. What I mean by this is that the IRD cannot go on a proverbial fishing exercise. So it cannot say to the Australian Taxation Office: \u201CWe want everyone between the ages of 21 and 28, between A and Z, who holds a New Zealand passport that is registered with these names.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is the interesting thing: it can go after only those people who it knows have a student loan and who it suspects may be living in Australia. When I say \u201Csuspects may be living in Australia\u201D, the bill is actually quite clear. The IRD does not have to prove they are living in Australia; it just has to suspect they are living in Australia. This is, again, where we come back to a common theme, which is that it has to actually know what it is looking for. If you do not know what you are looking for in tax law, then you will never ask the important question to get the information. We have talked about overseas trusts and this sort of thing, and I do not want to bring that up again, but it is a great example\u2014when someone says \u201Cwe have a transparent system\u201D how do we know it is transparent? Those who are seeking transparency will never seek answers for questions they do not know whether to ask or not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt actually would be good for the Minister in the chair, Craig Foss, to speak about this, and the reason I say this is that I have a suspicion that Mr Foss is an expert in this. I know he is a financial whiz. He has worked overseas in financial markets\u2014I say this as a positive, not a negative\u2014and I would like to hear his views on how this legislation compares with other pieces of tax legislation and whether he thinks this is consistent with other pieces of legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other clauses I would like to talk about are clauses 8 and 9. This is about the treatment for over-recovered additional deductions. I will just give a bit of background on this. The Commissioner of Inland Revenue is able to require a New Zealand - based student loan borrower\u2019s employer\u2014i.e., the boss of a student loan borrower\u2014to make additional deductions from that borrower\u2019s wages and salary to meet previous shortfalls in repayment obligations. The commissioner is allowed to do this by law without actually seeking the permission of the student loan borrower. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat the IRD does is it writes to an employer\u2014it must be in writing\u2014and the commissioner advises the employer of the total additional amount to be deducted, and by law the employer must deduct this money from the employee\u2019s account. But it is also recognised that there may be circumstances in which the commissioner might have got it wrong, or the employer has deducted too much, or something, so what it does is it ends up creating an inherently unfair situation for that employee\u2014that student loan borrower. There is one thing that I think one of my colleagues talked about, and that is the inherent fairness of the tax system. One of the guiding principles of any tax system, but certainly the New Zealand tax system, is fairness. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat clauses 8 and 9 do is allow a student loan borrower who feels aggrieved by the commissioner requiring an employer to take money without their knowledge to apply to the commissioner and say: \u201CHey, I think you\u2019ve made a mistake.\u201D It has to be done in writing, and there is a whole set of processes that a student loan borrower must follow, but what it does allow, at least, is a sense of redress, which, again, is important, and I think just adds weight to the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is just one other thing that I would like to mention, and it is a point of clarification, I suppose. A number of speakers have talked about deposits in income equalisation accounts and shareholders of close companies. Income equalisation is an interesting topic. What this is intended to do is allow persons to carry on\u2014initially, actually, it was agricultural, fishing, and forestry businesses\u2014and smooth their incomes over years when they may have massive highs and massive lows. So this is where clause 30, \u201CSchedule 3 amended\u201D, talks about deposits in main income equalisation accounts. Again, it brings with it that notion of fairness. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat it does allow, I believe, is the avoidance of the aggressive sort of tax planning that some individuals may feel they want to enter into, in terms of avoiding their obligations, which, again, is most important. But, basically, clause 30 inserts into schedule 3 new clause 7, which says: \u201CThe borrower\u2019s adjusted net income is increased by the amount of a main income equalisation deposit the borrower makes for the income year.\u201D So if the student loan borrower whacks $50,000 into this equalisation account, then his or her income increases by that amount. Again, this is used as a smoothing tactic, which is fair, and it makes a lot of sense, to be honest. But this just ensures that no one is avoiding paying their fair share. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe have talked about borrowers in trusts, but there are also borrowers who are major shareholders in close companies. Again, what the legislation does is list the different entities a borrower may be engaged in, in terms of just the normal, I would have thought, process of doing business\u2014companies, equalisation accounts, trusts etc., etc. What it does do\u2014and this is why we are supporting this part of the bill\u2014is introduce that level of fairness. But it also ensures, as mentioned, that people cannot\u2014well, in my view\u2014undertake the sort of aggressive tax planning that we want to avoid in our tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut that is probably all I am going to talk about for now. There still are some other issues that need to be clarified within Part 1, but let us see where we get to with the next speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022 data-id=\u00222acd8787c3944582bb6e80bd538e0d9b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222acd8787c3944582bb6e80bd538e0d9b\u0022\u003ETIM MACINDOE (Senior Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EPart 1 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000324\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022b038091a77cf4bf7ac6b499b2814e01d\u0022\u003EPart 2  Amendments to Income Tax Act 2007\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u002200e2e28cf2f94a07b133fb9d6b91aadf\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002200e2e28cf2f94a07b133fb9d6b91aadf\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E Part 2 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill basically consists of amendments to the Income Tax Act. This is, I suppose\u2014I was going to say the substance of the bill. That is a little unfair. It is not, because everything is important. This bill, just to give a little bit of background, is one of three bills that were designed to put the Government\u2019s 2-year brightline test into force. So what that is about is there was a feeling that overseas speculators were coming into this country, investing in houses for making a very quick capital gain, and onselling the houses within 2 years. The Inland Revenue Department (IRD)\u2014we talked about this before\u2014suggested a 5-year brightline. Treasury or the Minister of Revenue rejected that. We are not too sure why, because it was certainly recommended by the IRD. But once that was in place a whole lot of other legislation needed to fall in right behind it to ensure that there was no way that a 2-year brightline could be gained. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat we are talking about here is clauses 34 through to\u2014I am not too sure where Part 2 ends; it is quite a substantial part of the bill. It is quite technical, and I must admit there was a lot of debate in the Finance and Expenditure Committee, trying to really tighten this up. I must admit that we were lucky in the fact that we had our tax adviser. Our tax adviser is an incredible person, who knows the tax law like the back of her hand, and she was very, very good in advising us on how we could actually make this better. She worked very closely with the IRD in terms of tightening this up. This is the residential land withholding tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ELike all withholding taxes, it is a payment into an account. When a transaction has been undertaken and a full amount has been settled upon, then an amount is paid to the Government. But because we are talking about overseas owners here, or\u2014well, the definition is quite wide, actually, and Mr Faafoi may like to have a look at the definition of an overseas owner. Let me talk about the objective. The objective of the residential land withholding tax is to act as a collection mechanism for the brightline test. I think the Government calls it the capital gains tax you have when you are not having a capital gains tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat it is designed to do is to address an anomaly in our system that we feel very strongly about, and that is overseas speculation. Let us make no bones about this. This is overseas buyers coming into New Zealand, buying houses, not living in them\u2014in fact, not even moving to this country\u2014and selling them, without contributing anything at all. I am sure there are a number of speakers on our side of the House who will be keen to elaborate on this. As mentioned, the residential land withholding tax would require, as mentioned, income tax to be paid on any gains from the disposal of residential land that is acquired and disposed of within 2 years, subject to some exceptions\u2014and we did look at a number of exceptions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWith the introduction of the brightline test, we thought it was highly likely that overseas vendors who sell residential property within the 2 years will have a tax liability in relation to income from that property. However, we also acknowledge\u2014and this is what this part of the bill does\u2014that there is a general difficulty faced in collecting tax from foreign investors with no, or limited, presence in New Zealand. We think that this tax would optimise the effectiveness of the brightline test and support the integrity of the tax system. Of course, the integrity of the tax system is something that has been talked about since we started debating this bill at 3 o\u2019clock, and I suspect it will still be talked about by the time we wrap this bill up, and probably even in the next tax bill on the Order Paper as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe proposed tax is payable from 1 July 2016, and what we see in these 2-year time frames is that it can allow some interesting behaviour. What we were really afraid of is that someone would buy a house and sell it in 2 years and 1 day, reap the gains, and pay no tax. The concern that we have here is that tax advisers in this country who are very, very adept at\u2014what should I say\u2014minimising tax, will provide advice that if you are an overseas speculator and you are looking to buy a house and you want to avoid the residential land withholding tax, then make sure you can hold on to this property for just over 2 years. As mentioned, this tax is payable from 1 July 2016, in the same circumstance as the Taxation (Bright-line Test for Residential Land) Act, except there is no main home exemption for this. The reason there is no main home exemption is that we think that this probably was not a main home that you are investing or speculating in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe focus of the residential land withholding tax is on New Zealand residential land sold by offshore persons. Again, as mentioned, the definition of an \u201Coffshore person\u201D is not necessarily what you may expect. New Zealanders are included in this definition, but that is something that I will elaborate on a little bit later. A main home exemption is a compliance cost of marginal use. There will be an exemption for the disposal of inherited property, as well as relief for relationship property. We see this a lot in tax law\u2014if someone has to dispose of a property under urgency due to a marriage failure or something, then there has to be a provision in tax law that allows this. It is proposed to impose the residential land withholding tax at a point in time when New Zealand land is sold by an offshore vendor, so as to improve the collection of any annual income tax for the brightline residential income that the offshore person may have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt was argued here that the conveyancing lawyer would probably be the collection agent, but what was acknowledged in the select committee is that that is not necessarily the case. Mr Scott may talk on this, because he had some very interesting points to make in the select committee. We need to ensure that the conveyancing agent\u2014which is, as mentioned, normally a lawyer, and we can talk about a lawyer in this case, I suppose, but it is not always\u2014is not held liable for information he or she might not have had at a time and point when the seller disposed of the property. The payment of the residential land withholding tax generates a tax credit that may be used to pay annual income tax liability for the brightline test of residential land income. If the tax credit for the residential land withholding tax is not needed to pay income tax liability, then that tax credit is actually refunded. Again, this goes to the principle of tax law: you take tax when there is tax payable; you refund tax when there is a loss. There is nothing unusual in that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ELet us talk about an offshore person, because an offshore person also includes a New Zealand citizen who is overseas\u2014that is, if they have been overseas for the last 3 years. So, again, what we are looking at here is speculating in a market where, I suppose, you could say that person is not contributing in any way, shape, or form. At least in New Zealand, if you own speculative property you are paying tax and that tax is contributing to the upkeep of roads and schools and other core services. But if an investor is living overseas and they are investing in property, then I think it is very difficult to make an argument that they are contributing, even in another way through their taxes and their GST, etc. So this does include a New Zealander living offshore if they have been overseas for 3 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAn individual who holds a New Zealand residence class visa may be an offshore person if they have been living overseas for the last 12 months. New Zealand trusts and companies may, therefore, be offshore persons if there is a significant offshore interest in them. And, again, we debated what constituted an offshore trust or an offshore company. At this point in time I cannot recall whether we looked at blind trusts. I suspect we did not. I suspect now if we were looking at this bill we would pay particular attention to trusts that are blind or are overseas trusts or that are holding assets in New Zealand. We might have looked at this in a slightly different way, given the whole integrity of the New Zealand tax system has been called into account with recent events, but that is a conversation for another day or another time or another reading. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe mechanism proposed for the collection of the residential land withholding tax, as mentioned, is the point in time when the land located in New Zealand is disposed of, which is, primarily, an obligation of the offshore person or vendor. It is proposed that the offshore vendor\u2019s conveyancer, as mentioned\u2014usually a lawyer\u2014or, in absence of the vendor\u2019s conveyancer, the purchaser\u2019s conveyancer, is treated as the resident land withholding tax agent of the offshore vendor. In absence of the vendor\u2019s conveyancer\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022 data-id=\u00224583e88c34b242278ea1ea57f731ce0a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224583e88c34b242278ea1ea57f731ce0a\u0022\u003EDr DAVID CLARK (Labour\u2014Dunedin North):\u003C/span\u003E My colleague Stuart Nash was discussing the offshore persons aspects of this bill. I myself was not on the Finance and Expenditure Committee, so I will preface my comments with that, but I have identified, particularly in the notes around the bill\u2014and I will search further, for future contributions into the actual clauses in the bill\u2014the issues around anti - money-laundering identification in respect of offshore persons. There is a recommendation that comes back with this bill for amendments that will make gathering a bank account and understanding the bank account less onerous for those who are offshore persons. This, I think, is worrying, in light of the events of recent days. I invite members of the select committee to also contribute, because, as Mr Nash just noted, they might have looked at this in a different light in respect of blind trusts and other things had the events of the Panama Papers and so on, which have become public fodder in recent days, been in front of the committee at that stage.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EI note that in the commentary on the bill it says: \u201COfficials have undertaken to continue to work on solutions, whether legislative or operational, for some of the \u2026 practical difficulties and unintended consequences.\u201D It says that in a paragraph that speaks specifically to anti - money-laundering identity verification. Officials are wanting to maintain the integrity of the system, to make sure that the people who are operating here are vetted and to ensure that those people are not involved in money-laundering, but they are wanting to do that without placing too much burden on those people. Where that balance falls is a legitimate question to be asking in tax law. I think that what we have seen in recent days is that burden may not be in the right place. So I encourage those officials to look into that, and I look forward to this debate as it continues and as it begins to open up those questions of whether the balance is struck right in this part of the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThe anti - money-laundering verification undertaken by New Zealand entities\u2014somebody is exempt, I read, if they already have this verification. If they have achieved that verification once, it seems, they are exempt\u2014in this bill\u2014from having to achieve it again, to avoid duplication of process. Where are the checks and balances? Is that a once and for all thing? If somebody has been certified as being free of any kind of wrongdoing in respect of anti - money-laundering in one investigation, are they free forevermore? I wonder whether Mr Foss may be able to shed some light on that, as the person representing the bill to the Committee as the Minister in the chair, because these are questions that I think now demand answers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EWe have, in this country, a reputation as a fair dealer when it comes to tax\u2014historically, that is true\u2014but what we have seen over the years and during the time of this Government is the gap between rich and poor growing. We had tax changes that meant the top 40 percent of the benefits of those changes went to the top 10 percent of earners and the bottom earners got a few percent, which was swallowed up in a GST change. We have got a tax system that has become less fair over time, and people are concerned. The public whom I have spoken to in recent days have questioned me on whether our tax system is really fair any more, and here we have, in this bill, exemptions for people who have previously been cleared of money-laundering allegations, as I read it. I would appreciate it if the Minister in the chair would clarify whether there is a once and for all stamp of approval if people have been through one set of investigations or whether there are likely to be more investigations, and whether the tests that are in place for money-laundering are sufficient in this bill, because I am not clear, having read the notes\u2014as I said, I do want to go back and speak to the individual clauses and come back to this debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EI might not carry my particular contribution much further at this stage, because I do want to dig in and do a little bit more research, having just stumbled across this particular matter of concern. But what I can say, in closing, is that I think we need to be assured that we have a fair tax system. I think we are right, as Kiwis, to be worried when we see non-resident people taking advantage of our growing status as a tax haven, and the damage that that does to New Zealand\u2019s reputation. I think that the Panama Papers have cast a whole different light on the tax legislation that we pass through this House, and it will need to be more closely examined.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022 data-id=\u00223485f078b76f45f584ce55e76249faa7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223485f078b76f45f584ce55e76249faa7\u0022\u003EFLETCHER TABUTEAU (NZ First):\u003C/span\u003E I rise to oppose this part of the legislation, and I just want to underscore and talk about where we have come from to get to this point. In my opinion, this is the third part of what is a broken attempt on the part of this Government to, basically, claim that it is fixing up the issue of overseas speculators buying up New Zealand homes. Of course, I am speaking specifically to Part 2 of the legislation and the amendments to the Income Tax Act.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EWhat we do know is that Aucklanders are now paying record prices for their homes. In terms of context, it is from the previous two bits of legislation, which are supposedly the panacea to this problem, that we come to this third bit. But from the two pieces of legislation that have already been implemented\u2014because this one only seeks to establish how those payments are to be calculated and paid on the part of those overseas speculators\u2014we have already seen that the brightline legislation does not work. How do I know that? Because over the months leading up to Christmas and to the New Year we saw the legislation implemented and, actually, we saw a slight downturn in terms of purchases of Auckland homes from overseas speculators. We saw that. What we saw, though, was overseas speculators actually just trying to figure out what the legislation meant to them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EBasically, what they saw was that they only need to get an IRD number and that is it, and they can still carry on with that speculation and profit out of the Auckland housing market because the requirements on them are minimal and make no substantive changes to what they are trying to do, which is use Kiwis\u2019 homes as a profit mechanism. That is the gist of it. Kiwi homes are being used by overseas speculators for them to make money. New Zealand First insists that it is not fair and it is not acceptable, and we have also consistently said that this legislation will not work.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EHere, for example, is this bill, the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. We actually support two-thirds of this legislation, and we voted for the first part accordingly, but the reality is that the opportunity is here and now for the Committee and for Minister Woodhouse to perhaps break up this legislation\u2014break it up, so that New Zealand First can vote for common-sense parts of the legislation. For instance, we acknowledge that we do need to hold student debtors accountable. I think that in contrast to topical issues around tax and trusts at the moment, it is harsh and heavy-handed\u2014but here we are. It is a solution, and what we hold for one student we must hold for another; it does not matter where they are residing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EI turn specifically to the amendments to the Income Tax Act, which outline the grounds on which payment should be made. Generally speaking, even after all the law changes to supposedly slow speculation in Auckland, recent statistics\u2014I say again\u2014have proven that there has been a minimal effect, or actually no effect, on that speculation. What I want to point out at this stage\u2014it is very general, I acknowledge, and I will come to the specifics of the legislation\u2014in this opportunity to speak to the Committee, is that tax experts came back to the select committee, after the alterations and amendments, and basically said to the committee\u2014well, not basically; they said it outright\u2014that this part of the legislation, this residential land withholding tax, will not work. They said it to our faces, and, basically, they said it in several ways. They said that those who wish to speculate on New Zealand property and profit from it will adjust their behaviour ever so slightly\u2014in that, they referred to the 2-year time period. They will just wait\u2014they will wait, and they will make more money on it, if that is their wont, and they will adjust their behaviour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EThe other part is that if you look at the statistics and the money generated from this legislation\u2014and here is the rub\u2014this tax revenue legislation bill will, in fact, according to KPMG and others, accrue a negative net revenue to the Government. It will be a negative tax take\u2014that is what this tax legislation will achieve upon its implementation, once we establish who is liable and how they are going to pay. There are a whole lot of issues in how we determine who is liable and how they are going to pay, but we will come to those later.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EThe tax experts gave numbers in line with the Inland Revenue Department\u2019s own analysis, which suggested anywhere between $1 million and $5 million in terms of revenue-gathering from this legislation. Five million dollars sounds like a lot, but we know that in terms of\u2014I mean, that is one house in Auckland at the moment, is it not? It is next to nothing; it is ludicrous. Then they put the obvious to us and said that there is a cost in gathering this revenue. What you will find, when you juxtapose cost to revenue, as a good accountant is wont to do, is that the actual return to the Government coffers will be negative\u2014for a piece of legislation that we have been told will not work because behaviour from speculators will change. New Zealand First cannot and will not support absolutely farcical measures\u2014if you do not mind the language\u2014in terms of a Government standing up and, essentially, saying it will do something about this and, in fact, it knows full well it will not achieve any of the stated objectives that it has set out before us today. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022235bd5910b5e431586ff6bf6cd01d745\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022235bd5910b5e431586ff6bf6cd01d745\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E There are a couple of things that I would like to elaborate on. Just to go back to a clause that I was talking about before\u2014this is under the subheading \u201CLiability of conveyancers: reasonable reliance\u201D. We are talking about Part 2, clause 44, new section RL 2(6B): \u201CA paying agent is not liable for a penalty under Part 9 of the Tax Administration Act 1994 for a failure described in subsection (6)(b) \u2026\u201D. What we are basically saying here is that even though the lawyer or the conveyancing agent is, in fact, responsible for paying the tax, they are not liable if their client has not given them the information required to make the payment of that tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI suppose what I am saying here is that what we are requiring overseas investors to do is to provide their conveyancing agent with the correct information that allows the collection of this tax. There was a little bit of concern in the select committee about how this would play out and what would happen if an overseas investor knowingly or negligently gave false information, because it is quite hard tracking down people who live overseas, who are not part of this jurisdiction, and who are often part of a jurisdiction that is completely foreign to the vast majority of New Zealanders\u2014and some of them we do not even have tax agreements with. So we are relying, in fact, on the honesty of the overseas investor. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne thing that I would like to talk about is that we should actually, I suppose, understand when the residential land withholding tax will apply. It is quite an important part of the bill. It will apply when the property being sold is residential land. Again, we talked about what constitutes residential land, but the definitions are in the legislation, and it is defined for the purposes of the brightline test\u2014and this is one of the bills we talked about earlier. This is the tax bill that gives effect to the brightline test. This is when the vendor, or the seller, acquired the property\u2014now this is the important thing\u2014on or after 1 October 2015. Any land bought before 1 October 2015 is actually not subject to this, so if an overseas speculator has bought something on 29 September 2015, they can hold that for a year, or they can hold it for any amount of time, and avoid paying this tax at all. And, of course, the vendor is an offshore person. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing that is quite important, I suppose, is: how much does the person have to pay? Well, what will be required to be withheld\u2014and there is a difference between what is withheld and what is paid\u2014is 33 percent, or 28 percent if the vendor is a company, times the current purchase price minus the vendor\u2019s acquisition cost. So a stock standard example is if an offshore person buys a house for $100,000 and they sell it a year later for $150,000, then that is a $50,000 profit. If they are a company, then they have to pay $14,000 in residential land withholding tax, but they still bank $36,000. There is still quite a lot of money there that is in the account, or I should say it is the lower of 33 percent, or 28 percent if it is a company, and 10 percent times the current purchase price. So there are two equations in there that need to be met to ensure that it is very difficult to avoid paying your full amount, but let us go back to the amount of money that speculators can still make here. If a speculator buys a house for $100,000 and sells it for $150,000 within that 2-year period, or if it is a company or a trust it pays $14,000 in tax, they still bank $36,000. If they are an individual on the top tax rate and then they withhold $16,500, they still bank $33,000. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt is still quite a lot of money, but the interesting thing is that there is a clause in the bill that says that the residential land withholding tax will be paid before other disbursements are made at the time of settlement. There was a concern by real estate agents that perhaps they would not get their commission. We assured them that, in fact, no, they would get their commission\u2014that was sacrosanct\u2014so the real estate agents were quite happy about that. But if the vendor\u2019s conveyancing agent is required to pay the residential land withholding tax, this will be paid after the amount required to discharge the vendor\u2019s New Zealand mortgage has been paid. But the interesting thing is that if this would result in insufficient funds being available to pay the mortgage, then the amount of residential land withholding tax would be restricted to the difference between the current purchase price and the amount required to discharge the New Zealand mortgage.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022 data-id=\u0022443f84135b2e4b6dbff8129c91dee8db\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022443f84135b2e4b6dbff8129c91dee8db\u0022\u003EJAMI-LEE ROSS (National\u2014Botany):\u003C/span\u003E I appreciate the opportunity to answer a few of the points made by our colleagues on the other side of the Chamber. I just want to say at the outset that the Finance and Expenditure Committee worked pretty well together on this bill and we came to a few conclusions that were cross-party and, I think, were good for the overall legislation and the point that we landed in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003EI do want to answer a few things that some of our colleagues have raised though. I always enjoy following Fletcher Tabuteau and being able to answer some of the points that he has raised. He basically said that (1) the brightline test is not working\u2014well, it only came in late last year. And (2) this tax is not sensible, or practical\u2014I think that might have been the word that he used. Well, apparently, not taxing people is what they would prefer; I do not know that that is really a position the New Zealand public would agree with. And (3) he spoke about the amount of money that it would bring in and he was saying that it was not going to be a high amount of money. Well, quite frankly, it does not matter how much money comes in; it is about ensuring that overseas purchasers of property and offshore persons are paying their tax appropriately. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003EThat is what this is all about. It is not about making huge amounts of money for the Government; it is about ensuring that overseas purchasers of property are paying their fair share. The easiest way that we feel we can target those people who are offshore persons, and who could find it easier to avoid paying tax because they are offshore, is to tax them by way of a residential land withholding tax. That is what this is all about. It is not about making huge amounts of money. So a residential land withholding tax will ensure that there is greater compliance with the tax obligations that those offshore people have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003EIn terms of the brightline test, it was put in specifically to ensure that those who are speculating on property are taxed appropriately. There is already the intentions-based test that has always been there, and so I reject the claim that Mr Nash made, that if someone purchased a property prior to October 2015 they would not be subject to tax if they speculate on it and sell the property. That is not true because they will still be subject to tax if they have speculated and their intention was to make a capital gain on that property. The date used here is simply to ensure that we have a line in the sand. Whether that line in the sand was October 2015, 1 January 2015, or whatever date you put in there, there is always going to be a point at which you could say: \u201CWell, if somebody purchased a property before that date, then they won\u2019t be subject to x, y, z.\u201D The reality is that the intentions-based test has always been there, is still there, still applies, and always will still apply, and that this is separate from that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022086751b15f48404793478d14abaffa44\u0022\u003EStuart Nash\u003C/span\u003E: But if it works, why are we doing this?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221ac1b45560134a6890bd86821931f4d4\u0022\u003EJAMI-LEE ROSS\u003C/span\u003E: Well, if it works\u2014the reality is that the Government took some action because there were claims by the media, claims by the public, and concern by the public that offshore people speculating on property were not being taxed appropriately. So we changed the law and put in place the brightline test to ensure greater compliance. But the intentions-based test has always been there, will still be there, and does still apply to a purchase made in September or prior to October\u2014so Mr Nash\u2019s claim is incorrect there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003EMr Tabuteau\u2019s claims that the brightline test does not work\u2014he had some interesting claims around that because he said that the number of offshore people buying property declined after the brightline test came in. I would have thought that actually means it had some impact and it actually was working. So, Mr Tabuteau, I do not think we can make that claim. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003EFinally, I just want to touch on the point that Mr Nash made around the liability of conveyancers and them having to rely on the information provided to them by the individuals whom they are tasked to work with and act on behalf of. I guess we always have to come to the point where we consider complexity and how difficult we made it in ensuring that there was compliance. We could have made the tax agents and the conveyancers liable for ensuring the information was correct, but that would have added a huge amount of complexity that, quite frankly, would be unnecessary for most of the people who are involved in this. By ensuring that the liability did not lie with the conveyancers and that they could rely on the information that they were given by their clients, it reduces some of the complexity, but those people are still subject to other aspects of the Income Tax Act around providing documents fraudulently. So if there was evidence of that happening, no, the conveyancers would not be liable, but the Inland Revenue Department would still have the ability to go after the people providing fraudulent information. I think the provisions that are in Part 2 that the committee arrived at, where we made some changes around the definition of \u201Coffshore person\u201D and landed in that space where 25 percent meant an individual or a company or group of people were not considered offshore, but over\u2014[Bell rung] Mr Chair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a492e3fecb324ed9a993f13d888b7600\u0022\u003EThe CHAIRPERSON (Hon Trevor Mallard)\u003C/span\u003E: Jami-Lee Ross.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022163d0b68-eb0e-4094-9bed-99e184f063e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002242ecfffa5a6e48b1ba261c571746f755\u0022\u003EJAMI-LEE ROSS\u003C/span\u003E: I just want to finish off this point: that we arrived at the 25:75 split, where 25 percent meant that they were not considered offshore, but 75 percent or over and above 25 percent meant they were considered offshore, which I think was a good space that the committee landed at. I think it has improved this bill considerably.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u00221b8fa79d551b44148319134c7d9be89a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221b8fa79d551b44148319134c7d9be89a\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E Thank you very much, Mr Chair\u2014[Interruption] A silent colleague to my left there, but I am sure\u2014[Interruption] Thank you. I am sure Jacinda Ardern will take a call shortly. I want to pick up Jami-Lee Ross\u2019s observation about the purpose of Part 2 being about the tax obligations of offshore people and those people paying their fair share. It is a noble goal and one that the Finance and Expenditure Committee had in its mind as we worked our way through the Government\u2019s policy to introduce a residential land withholding tax for offshore persons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIf only such noble goals were part of the Government\u2019s overall tax policy and offshore people paid their fair share, for instance, through trusts. Then we would actually have a tax system that New Zealanders could look at and, as my colleague Jami-Lee has just said, see that everybody pays their fair share. But there was a complete failure by the Government to have that kind of consistency, as we have seen in the last few days, and it all gets murkier. We now see that the Prime Minister has got deposits in companies that specialise in offshore trusts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bc81091f524842caa8b16e16e6c84a89\u0022\u003EDavid Bennett\u003C/span\u003E: Oh, come on. Get on the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022df981b148bff47469629798bb4dfe15e\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: It gets murkier by the moment, Mr Bennett. That is what happens when you do not front up and go to New Zealanders with information about your tax affairs. Mr Bennett might not care about that, but other New Zealanders do. They want to see fairness in the tax system\u2014just as Jami-Lee Ross said he thought this part of the bill was aimed at. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIt was disturbing in the select committee, as we worked through the residential land withholding tax issue, that we were correcting mistakes made in legislation passed only a matter of months earlier. We did that twice, once when covering Part 2 and once when covering Part 4. Essentially, that came down to the fact that the various new definitions that the Government had come up with to put in both the Income Tax Act and the Tax Administration Act did not fit when it came to a residential land withholding tax issue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIn this part of the bill we are looking at the definition of \u201Coffshore person\u201D. I do support what Jami-Lee Ross said, which is that the committee did come to the conclusion that the definition was far too broad when it came to being able to implement a residential withholding tax in a meaningful and sensible way. The officials from the Inland Revenue Department came to the committee and said that if we kept the same definition for \u201Coffshore person\u201D as we passed in the previous piece of legislation, we would find that almost impossible to implement. They gave us an example of a trust or a partnership where the partner with a 1 percent share could make the entire partnership into an offshore person, and that would then put in place a set of obligations that would have been difficult both for that entity and for the Inland Revenue Department to follow up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003ESo we on this side of the House accepted that change and agreed to it on the grounds that what we are trying to do is create a basis by which those who do invest in New Zealand from offshore have an understanding of what the requirements on them are. That should not be read as members on this side of the House believing that we do not think those who are offshore persons have obligations, because we do. They should have obligations that make them part of a globally transparent system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAlthough in this particular aspect of the definition of \u201Coffshore person\u201D we can see sense, the Minister in the chair might want to take a call here and talk about the consistency now of the obligations of offshore people across the Income Tax Act. What we are setting up, I believe, as a result of the changes that we are making here, is a system where we are putting certain obligations on offshore persons with regard to the residential land withholding tax and then completely ignoring making those obligations tighter, for instance, around foreign trusts. The Minister might want to stand up and let us know whether he thinks we are being consistent. Yes, we are changing and amending the legislation to make it different from the two previous pieces of legislation that we passed, but is that consistent across all of the tax legislation that we have? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe other point that I want to pick up here is whether or not we can use the term \u201Coffshore person\u201D at all. That was an amendment that we made, again, in the committee. So we now have, in the Act, an \u201Coffshore person\u201D, and, now, under clause 45(8), an \u201Coffshore RLWT person\u201D. The Government has got itself in a position where it is trying so finely to define within this part exactly who will be covered by the new residential withholding tax that it has had to create a new class of person within the Act. [Bell rung] Mr Chair\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ea3da254194462db1723ed1843383ca\u0022\u003EThe CHAIRPERSON (Hon Trevor Mallard)\u003C/span\u003E: Grant Robertson.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bd627c218df6491b87948f451dd576c7\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: I will not take a full second call on this, but I just want to make the point that this level of complexity around what the Government thinks it is trying to achieve with the brightline test highlights to me the fact that it did not think through all of these particular policies together. This is the third bill in a series of three. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAt each part of the select committee process the large accounting firms in New Zealand have come to the committee and said \u201CThe Government\u2019s policy position is confusing us, because we have now had a series of changes\u201D\u2014I am using clause 45(8) to highlight this\u2014\u201Cwhere we have different definitions and different meanings.\u201D The accountancy profession, which, for various reasons, is getting a bit of a hauling over the coals at the moment, was telling the select committee and telling New Zealanders that it does not believe that the Government has consistent policy here or policy that is easy to follow. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EMy fear is that this will not be the last time, possibly even this year, that we end up amending legislation we have only just passed. That really comes down to poor work by the Minister, in my view, in not having a decent and consistent plan for how we are going to be able to do this. So we now have an offshore residential land withholding tax person alongside an offshore person, and a definition of \u201Coffshore person\u201D that we have changed, as well. We are making those three changes all in one go because the Government, basically, could not get its act together. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI just wanted to make those points on Part 2. I am going to return shortly, in a later call, to the other change that we have made around bank account requirements for offshore persons. This is largely dealt with under the Tax Administration Act provisions that fall under Part 4, but it does bear mentioning that these clauses within Part 2 also indicate where the Government has not been able to get its act together and have a coherent policy.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022 data-id=\u0022f39e06e6b4ef404bb9ecb9d36a62092d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f39e06e6b4ef404bb9ecb9d36a62092d\u0022\u003EJACINDA ARDERN (Labour):\u003C/span\u003E I would like to base my contribution on Part 2 around some of the discussion contained in the regulatory impact statement because that canvasses the degree to which the Inland Revenue Department (IRD), under the direction of Ministers, explores alternatives to the tool that was eventually settled on to underpin the brightline test, which is the residential land withholding tax that is set out in Part 2. I think that what is interesting is in the setting out of the problem definition, before the officials went out and consulted on the options that are then contained in Part 2\u2014the problem definition that we see the Government has used in that consultation document and in the subsequent regulatory impact statement is obviously quite broad. It says: \u201CThe Government is concerned with high house prices,\u201D\u2014something we can all agree is of major concern\u2014\u201Cparticularly in the Auckland area. \u2026 Other possible causes, both on the supply and demand sides, are being separately considered.\u201D\u2014we wait with bated breath, but\u2014\u201CProperty speculation is seen as one of a number of causes of the current prices.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003ESo there is obviously, up front, some acknowledgment of the issues, but there are some limitations to our ability to use an evidence-based approach in dealing with some of those issues, and those limitations are included in the regulatory impact statement. It does set out that one of those limitations is, of course, the lack of information that we have on the exact breadth of the offshore speculator issue. We see that on page 1 of the regulatory impact statement it states: \u201CThe exact fiscal and compliance cost figures for the proposed bright-line test are not available because Inland Revenue does not currently have accurate data on the types and levels of land sales occurring or how much is collected under the current land sale rules.\u201D So we have had to make some assumptions, but I think it is fair to assume\u2014as Labour obviously has\u2014that the issue of overseas-based foreign speculators is significant in terms of the impact it is having, which is, essentially, what Part 2 speaks to. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EThe other limitation is also set out in the regulatory impact statement. It states that \u201CThe analysis in this RIS needs to be considered in light of the additional constraint faced by Inland Revenue at the present time,\u201D\u2014which is not just a lack of data\u2014\u201Cwhich is its inability to make significant systems changes in advance of the relevant stage of development of its Business Transformation programme.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003ESo I guess my question to Minister Michael Woodhouse is on the consideration of the various mechanisms in order to underpin the brightline test, which include: \u201COption 1: Relying on existing compliance measures \u2026 Option 2: Status quo, but provide more guidance on tax obligations;\u201D\u2014a bit of an education programme\u2014\u201COption 3: Status quo, but review effectiveness of bright-line test in three to four years;\u201D\u2014so, have a punt and see whether or not it is working\u2014\u201COption 4: Introduce a withholding tax on sales of residential property made within the two-year bright-line [test].\u201D In amongst all of those options, what options were not canvassed as a result of the constraints that the IRD has articulated are as a result of the significant systems changes it is experiencing as part of its Business Transformation programme? Was there anything that was not considered because of those constraints? I am interested to know. There may not have been\u2014we may have canvassed everything in the submission process that we are now debating in Part 2, but I doubt that would be the case because we have heard of instances before where the IRD has expressed concerns over those limitations and its ability to alter the rules under which it operates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EBut I do want to come to the question of compliance, because the reason that we have fallen on the residential withholding tax option is that obviously the IRD has determined that other forms of compliance would be less effective. As I mentioned previously, option 1 is to rely on what is existing\u2014so, the status quo\u2014and having more guidance around obligations was dismissed. Why was that option dismissed? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EWell, the reason that the withholding tax option in Part 2 was chosen is set out in the regulatory impact statement, which says: \u201C7. New Zealand taxes its tax residents on their worldwide income. New Zealand also taxes foreign investors on income that is sourced in New Zealand. When a foreign investor has a branch or controls a subsidiary in New Zealand, tax can be imposed on the New Zealand-sourced income of that branch or subsidiary in the same way as it would be on New Zealanders. However, when the foreign investor does not have a New Zealand presence, it is more difficult for New Zealand to collect tax from them. 8. New Zealand\u2019s tax system operates on the principle of voluntary compliance, which relies on taxpayers understanding their tax obligations and how the wider tax system works.\u201D\u2014keeping in mind that we do operate somewhat of a \u201Cdon\u2019t ask, don\u2019t tell\u201D operation here as well\u2014\u201C9. Foreign investors may not always have the same level of understanding as taxpayers based in New Zealand, and they do not have the same level of connection to New Zealand that would otherwise create an intrinsic incentive to voluntarily comply with their New Zealand tax obligations.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EI think that last statement is quite interesting\u2014\u201Cthey do not have the same level of connection to New Zealand that would otherwise create an intrinsic incentive to voluntarily comply with the New Zealand tax obligations.\u201D I think you could apply the same rule of thumb, generally, where one who might use New Zealand, for instance, as a tax haven might also not have concern for perceptions and the reputational risk for New Zealand around their use of a New Zealand - based tax haven as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EI guess that what the IRD is pointing out there is that unless you have a domestic connection to New Zealand, your sense of obligation to us\u2014be it in your literal tax obligations, or even in the reputational risk you may pose by the way that you conduct your affairs\u2014is not top of mind. It is a reason, perhaps, for us to be somewhat more concerned about compliance by those who should be covered not only by the brightline test but also probably more broadly within our tax system. I hope I am not being too subtle in drawing that comparison there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EI think it is a point well made in the regulatory impact statement. Actually, it is canvassed in option 2 of the regulatory impact statement, as well. Option 2, of course, was simply maintaining the status quo but providing more information and guidance on tax obligations in relation to residential property. I am glad that option 2 was not opted for. From my perspective, the idea that with a bit of a pamphlet we could assume that tax obligations would be fulfilled would, I think, be a bit naive. In fact, that is expanded on in paragraph 42 of the regulatory impact statement. It says that \u201Cthe success of this option is dependent on another major assumption\u2014that non-compliance with the proposed bright-line test will arise from a lack of information and knowledge about the tax implications of sales of residential land.\u201D Saying \u201CI\u2019m sorry, I didn\u2019t pay. I just didn\u2019t know.\u201D\u2014if only that were a basis for not complying with one\u2019s obligations, I am sure many will think. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EIt goes on to say \u201CThere will be instances where an improved understanding of the tax rules and one\u2019s tax obligations in relation to a particular transaction may lead to higher levels of compliance.\u201D\u2014if only that were the case\u2014\u201CHowever, there will be taxpayers who, regardless of their level of knowledge, will not voluntarily comply with their tax obligations.\u201D Sadly, the IRD is articulating here what many of us will know, which is that just because people know about their tax obligations, it will not mean that they will merrily skip to their IRD office in order to fulfil them forthwith. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003ESo there are a lot of interesting issues playing out in this paper where the IRD is freely acknowledging that knowledge is not enough and that connection to a country is not enough; in fact, if anything, it probably undermines our system. It has built in assumptions in this case that non-compliance is often deliberate. I am glad that the officials have done that, because it is a realistic take on people\u2019s approach to taxation in New Zealand, let alone the approach of those who do not have a connection to New Zealand. So, although I think that probably the option that officials opted for was the right one, we would do well to reflect on the rationale for why it is that we opted for something more proactive. But I would like to highlight again that I would be very interested in having the Minister expand on whether other options were canvassed. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022 data-id=\u002248b553d0f5fc42f182340a5e107eeb5f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002248b553d0f5fc42f182340a5e107eeb5f\u0022\u003EBARBARA KURIGER (National\u2014Taranaki - King Country):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00222a19dc8db0274f3f873c18a2c8620b22\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222a19dc8db0274f3f873c18a2c8620b22\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E I would like to just finish elaborating on the example that I gave earlier. There is a clause in the bill that basically says that, first and foremost, resident withholding tax must be paid after the New Zealand mortgage is paid off. However, the commentary on the bill says: \u201CIf this would result in sufficient funds being available to pay [residential land withholding tax], the amount of [residential land withholding tax] payable will be restricted to the difference between the current purchase price and the amount required to discharge the \u2026 mortgage.\u201D In the Finance and Expenditure Committee the thing that we talked about was how that sort of situation would arise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ELet me give you an example: an investor buys a property for $1 million, sells it 18 months later for $1.5 million\u2014not unheard of in any way, shape, or form\u2014so they have made a profit of $500,000. If it is a company, there is a $140,000 tax liability there. But the interesting thing about this is, for this clause to come into play, there would have to be a New Zealand mortgage above $1.36 million. I am not too sure how that could arise, unless there was some sort of negative gearing going on. Negative gearing in the property market\u2014it could never happen, could it? I remember trying to buy a house in Auckland at one point in time, and I thought that I had put in a very good price. The house had a valuation of about $700,000\u2014it was a long time ago\u2014and I was told that the guy had a $1.5 million mortgage against it. It was a well-known property developer who had just geared this up. So we just have to be a little bit careful about the games that people play. I suppose, as Jacinda Ardern has just outlined, there are those who will seek to game the system no matter what.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI think it is probably worth looking at the definition of \u201Cresidential land\u201D in New Zealand, because we probably all have a reasonable person\u2019s definition of \u201Cresidential land\u201D, but it is slightly more complicated than that. In the commentary on the bill, the definition of \u201Cresidential land\u201D is \u201Cland that has a dwelling on it;\u201D\u2014well, that makes sense; I suppose that is what we would automatically assume\u2014but it is also \u201Cland for which the owner has an arrangement that relates to erecting a dwelling;\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EFor instance, an investor has bought a bare piece of land upon which there are plans and consents to put a dwelling; the dwelling perhaps does not go up and the investor sells that bare piece of land within 18 months\u2014well, that is still classed as residential land. The definition in the commentary on the bill continues: \u201Cbare land that may be used for erecting a dwelling under the rules and the relevant operative district plan;\u201D\u2014so again, this relates to a circumstance where perhaps an overseas investor has bought a chunk of land upon which they were planning to put six units. If that does not go ahead and the land is sold\u2014the units are not erected\u2014it is still classed as residential land and an investor still has to pay residential land withholding tax for that. The other thing is that residential land \u201Cdoes not include land that is farm land or used predominantly as business premises.\u201D Again, we saw clarification around what business premises predominantly are, and I think we came to an elegant solution, but, by and large, those other three definitions will preclude farmland and commercial property.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne thing I note in the commentary is that \u201Cthis reference to income under the bright-line test means that there will not need to be a land title transfer\u201D. Ordinarily with the sale and purchase of a house there is a transfer and that triggers the sale, but \u201Cthere will only need to be a residential land purchase amount.\u201D There is a little bit of nuance there, but it is important, I suppose, that we understand this\u2014and certainly conveyancers are undertaking this, if in fact they believe that it does not kick in because there has not been a land transfer\u2014it still triggers. \u201CThis means that off-the-plan sales, for example, will still be subject to [residential land withholding tax] if other conditions are also met.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing, and it has been brought up before, is that the brightline test does contain an exception if the residential land that is being disposed of is the vendor\u2019s main home. There is, of course, no main home exemption in this bill because we are talking about only overseas investors. By any definition, an overseas investor buying a New Zealand property could not claim that that is their main home, because they do not live in it. It makes sense.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing in the commentary is that \u201Cthere will be an exemption or rollover relief from [residential land withholding tax] for inherited property and for transfers of relationship property \u2026 under the brightline test.\u201D Again, keep in mind that we are talking about only a 2-year window here\u2014so I suppose that if someone dies within 2 years of buying a property and their estate or the beneficiaries of their will inherit that property, there is no liability triggered. However, there is still the 2-year\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022e5df142692154c159512d6c48bb81e8c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e5df142692154c159512d6c48bb81e8c\u0022\u003EThe CHAIRPERSON (Hon Trevor Mallard)\u003C/span\u003E: The member has had four calls. He does not get any more.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022 data-id=\u0022106d798f8cd048298c033b9c9a93520a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022106d798f8cd048298c033b9c9a93520a\u0022\u003EPHIL TWYFORD (Labour\u2014Te Atat\u016B):\u003C/span\u003E You have had quite enough, Mr Nash. I want to come back to some of the comments that were made by Jami-Lee Ross earlier in the debate when he talked about the rationale for this bill and the argument that we have touched on today about whether, in fact, the associated legislation\u2014the brightline test and the requirement for non-resident foreign buyers of residential property to register with the Inland Revenue Department, which Part 2 is enabling\u2014has had any effect or not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003EWe have data right now, actually\u2014a right-up-to-the-minute release by the Real Estate Institute of New Zealand\u2014that shows that, in fact, in the last month the median house price in Auckland, which is the market most affected by the problems that this bill is purportedly trying to address, has gone up by $70,000. That is 1\u00BD times the median income and I think it really undermines any kind of optimism that we have been hearing from members on the Government benches that the brightline test, the residential land withholding tax, and the requirement for non-resident foreign buyers to register with the Inland Revenue Department has had any kind of sustained impact on the speculative pressures that have been overheating the Auckland housing market. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003EJami-Lee Ross mounted a great, spirited defence of the intention test, as if this was enough and as if this was working, but he is completely stymied by the fact that the Government introduced this legislation and these measures presumably to tackle some kind of real problem\u2014or was it an imagined problem? It was not clear from what Jami-Lee Ross was saying. The residential land withholding tax is in place there in Part 2 of this bill to ensure that the brightline test applies to non-resident foreign buyers. As Jacinda Ardern pointed out, the Inland Revenue Department, in its advice on this bill, raised the point that we do not have the data\u2014that we do not know what the scale of non-resident foreign buyers in the Auckland market is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003EWhen the policy announcement was made that led to this bill and others, I think it was the Hon Steven Joyce who said that the Government would release the data that it would be gathering on non-resident foreign buyers by way of the requirement that they open a bank account and register with the Inland Revenue Department, and that it would make this data available by 16 April. We are getting very near to 16 April, and yet there has been nary a whimper from the Government on the question of this data and what it shows. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003EBut, interestingly, Shamubeel Eaqub, the independent economist, said a couple of weeks ago in the media that\u2014and it appeared that he has some kind of access to the data that has been gathered\u2014330 properties per month, on average, have been bought by non-resident foreign buyers over the last 6 months. That is 330 properties per month since the law came into force requiring foreign buyers to register with the Inland Revenue Department. That volume of sales\u2014330 on average per month over 6 months\u2014would account for 5 percent of all house sales across New Zealand, which is significant, I think. But, as Shamubeel Eaqub said at the time, it is probably more likely to be 18 percent of all sales in the Auckland market because the presence of non-resident foreign buyers has been so heavily concentrated in Auckland. If it is anything like 18 percent of sales in the Auckland market, it is no wonder that the Government has not made any kind of move so far to release that data, and I would guess that it will not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003EColleen Milne of the Real Estate Institute also said recently that these new tax rules seem to be having limited impact, and she predicted that the decline in sales that has been seen\u2014I think over November, December, and January, when there was no doubt that there had been a sort of softening in the Auckland market\u2014would be transitory.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022 data-id=\u0022ff30b636796e4bcfbd9525e937d7d0f2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ff30b636796e4bcfbd9525e937d7d0f2\u0022\u003EALASTAIR SCOTT (National\u2014Wairarapa):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u0022d7ae6be9272d4cb29995a2c53f3fd094\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d7ae6be9272d4cb29995a2c53f3fd094\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E I think my colleague Phil Twyford was making some very good points there. The Finance and Expenditure Committee was told when considering the bill that the quantum that the Inland Revenue Department thought it would be able to gain from the brightline test had not changed from what we had initially been told, which was the whopping sum of $5 million a year. It also concluded in its assessment to us that it was going to cost about $2 million to set the whole thing up, so things are not looking good in terms of the scale of income from such a weak instrument as this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI want to return to the definitional issues around \u201Coffshore person\u201D\u2014or, in fact, an offshore residential land withholding tax person, or \u201Coffshore RLWT person\u201D\u2014as is now included in clause 45(8). There are two reasons why I want to do that. The first of those is that I am not sure that everybody listening to this debate will fully understand the definition and who is captured by this. Then, once we have clarified what that definition is, I want to raise a couple of questions for the Minister in the chair, the Hon Michael Woodhouse, around who is considered a person in terms of a trust. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe definition in clause 45(8) would tell you that for the purposes of this bill a residential land withholding tax offshore person is a person who \u201Cis a New Zealand citizen who is outside New Zealand and they have not been in New Zealand within the last 3 years:\u201D, or \u201Cthe person holds a residence class visa \u2026 and they are outside New Zealand and have not been in New Zealand within the last 12 months\u201D. That is actually a very important point in the context of who is considered by the Inland Revenue Department, at any given moment, not to be a New Zealander for tax purposes\u2014to be an \u201Coffshore person\u201D for tax purposes. The idea that those who hold residence visas\u2014and there are many New Zealanders who have lived here for a very long time but do not have citizenship\u2014you have to have not been here for only 12 months. It is actually a very tight provision. I wonder whether the Minister wants to let us know whether that reflects other parts of tax law in terms of that. Then you have 3 years for a citizen, and the third class is a person who is obviously not a New Zealand citizen and does not have a residence class visa. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003ESo we have set up there who the offshore person is\u2014and, as I say, I think a lot of New Zealanders would perhaps be surprised to learn that if they have a residence class visa but they have been away for 12 months, they are no longer considered to be this, and they then fall under the provisions within the bill here. But then, if we go further into the definition we see that \u201Ca person that is a trustee of a trust, if\u2014(i) more than 25% of the trustees of the trust are offshore RLWT persons:\u201D\u2014and then\u2014\u201C(ii) more than 25% of the people that have the power to appoint or remove a trustee of the trust, or to amend the trust deed, are offshore RLWT persons:\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EHere we get into the inconsistencies that are now emerging in our income tax law about exactly what is considered here to be an offshore trust. When we have got under the foreign trust rules that you can establish yourself and claim to be an offshore person, or be an offshore person and simply have a trustee who is set up to run the trust for you as a means of avoiding tax\u2014Mr Bennett is poised because he wants to get up and talk about people who avoid tax\u2014that is the danger in having a range of definitions about who an offshore person is across different parts of our legislation, and that is now, effectively, created here in the definition in clause 45(8). \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EBut then we move further down in clause 45(8) and we get into what I think is perhaps an even murkier area, and one that the Minister in the chair might want to take a call on. We see that we are talking now about people who are offshore residential land withholding tax, or RLWT, persons. The select committee has inserted the words \u201Cthe person is a partner in a limited partnership or an owner of an effective look-through interest in a look-through company (LTC), and more than 25% of the partnership\u2019s partnership shares\u201D are, effectively, held by offshore residential land withholding tax persons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe rules around look-through companies were changed in this House in 2011. They were changed by the Government in such a way that those look-through companies could be zero-rated for tax purposes. That is the heart of the concern that a lot of New Zealanders now have about the massive growth in foreign trusts, because those look-through companies sitting alongside foreign trusts are part of the combo pack that Mossack Fonseca has been selling to its investors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d61e13d4745d4b6e887271401975d5f1\u0022\u003EDavid Bennett\u003C/span\u003E: He\u2019s not even on the bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b7e400b0923a4984a804bd352a62b126\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: It is the great combo pack where you can get away without paying any tax whatsoever, and one of those parts, Mr Bennett, I say for your benefit, is a look-through company that is now zero-rated for tax purposes. In this clause, if more than 25 percent of the people who have an interest in one of those look-through companies is an offshore person for residential land withholding tax purposes, then that look-through company is considered to be a person under this bill. That is setting up yet another situation in which look-through companies could potentially be exploited. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EGiven what has been happening in terms of the release of the Panama Papers, and given what has been happening here, I think the Minister in the chair might want to get up and tell us whether he is confident that we have the arrangements around look-through companies and that he is confident in terms of putting them within this definition of who an offshore residential land withholding tax person is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe did not discuss, I have to say, in the committee whether or not that was a sufficiently tight definition, or whether there are sufficient safeguards when it comes to look-through companies, but I do know that that change has been critical in the growth of foreign trusts that are being used for tax evasion purposes in New Zealand. There is absolutely no doubt, because when you put foreign trusts alongside look-through companies, which can be zero-rated in New Zealand for tax purposes, that we\u2014I am sure, Mr Chair, the frown on your face might indicate that there is a point at which I am going a little beyond the bill here, but I think it is a relevant consideration because the rules around look-through companies are now the subject of international attention, and here we are making a change to how they will be used in terms of defining offshore persons for residential land withholding tax. I think it is a legitimate question to be asked. Clearly, the fact that property is owned in New Zealand by one of these look-through companies may mean that that is less of an issue, but that is something that the Minister might choose to have something to say about in a moment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAs I still have the call, the other point that I will make at the moment is around the question of the information requirements. This is clauses 44 and 45 again. It is important to note that when we considered these matters in the select committee there was a belief that the information requirements for New Zealand taxpayers were clearly stated and understood, but not necessarily by those who were offshore persons. A series of changes has now been made to ensure that we do have that level of information. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAgain, this is an issue of consistency for the Government\u2014consistency around whether or not information requirements across the Income Tax Act and the Tax Administration Act for offshore persons are consistent. It is quite clear to me that because the Government has relooked at these particular provisions around residential land withholding tax, it has created a series of information requirements in terms of what information must be provided to the Commissioner of Inland Revenue. There is now new section 54C in the Tax Administration Act, inserted by clause 72, and subsection (4) will require vendors to provide, at the very least, their full name, address, and IRD number, and to state whether or not they are an offshore person. If they are an offshore person, the vendor must also state whether they are associated with the purchaser and whether the disposal of the residential land is, or would be, considered income under the brightline test\u2014ignoring the brightline test\u2019s home exemption. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere, again, you have now a series of things that an offshore person must do under this piece of legislation that we are passing right now, tonight. But those offshore persons have a completely different set of requirements and disclosures under other parts of our tax law, particularly those around foreign trusts. So, once again, although this might be the right thing to do to enable the implementation of this residential land withholding tax, it sets up, in my mind, a series of inconsistencies in the law about disclosure and information that I think New Zealanders would want to see ironed out. As other colleagues have stated, the heart of our tax system is that it is fair, that it is easy and simple to understand, and that people are treated fairly. I think we run the risk, with clauses like this, that we highlight a particular type of offshore person\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u00223d4b20f6d80040eb8cf285976baf0afa\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223d4b20f6d80040eb8cf285976baf0afa\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002283407cf67b1447babdd995fead88e5aa\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 63\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 59; M\u0101ori Party 2; ACT New Zealand 1; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 58\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 32; Green Party 14; New Zealand First 12.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002262be75d4078047298f3ac81e59ff3326\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That Part 2 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 109\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 59; New Zealand Labour 32; Green Party 14; M\u0101ori Party 2; ACT New Zealand 1; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 12\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand First 12.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EPart 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000419\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022a3f10b9a759c4d89a49c66dc557faf54\u0022\u003EPart 3  Amendments to Goods and Services Tax Act 1985\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022b04928bec35244a781305c3b40fddbe9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b04928bec35244a781305c3b40fddbe9\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E This is the part that there was quite a bit debate on in the Finance and Expenditure Committee. We just do not think it went far enough at all. The principal Act, the Goods and Services Tax Act, applies to all consumption that occurs in New Zealand. The reason for that is that it is fair, it is efficient, it is simple, it is easy to understand, and there are no complications. But the thing about this is that when GST was introduced in 1986 I do not think anyone had ever heard of the internet, let alone the online purchasing of goods and services. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EGST was set at around 10 percent, it then went up to 12.5 percent, and now it sits at around 15 percent, after this Government said that it would not increase GST but it did. But that is the way it is, I suppose. The concern we have is that this is about putting a goods and services tax on intangibles. This is online services\u2014cross-border supplies of remote services. So it is targeting a certain area. It was colloquially called the net services tax. If a company generates New Zealand receipts exceeding $60,000 over a 12-month period, then it has to pay GST. That is consistent with a New Zealand company. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut the thing with this bill is we think it should have gone a whole lot further. What this is, in effect, doing is providing a 15 percent competitive advantage to all goods purchased offshore, and not just electronic goods. I mean, it is good that we are levelling the playing field in terms of electronic goods and services. We agree with that, and that is why we are supporting this part of the bill. But here was an opportunity to go even further. I come from a provincial city, where a lot of our retailers are struggling at the moment. Part of that is because there is not that much money in the economy because things are a bit rough in provincial New Zealand, but also part of that is due to the massive explosion in online shopping. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EYou can go online these days and buy a pair of jeans anywhere in the world, and they can be delivered within a week, and do you know what? You get an automatic 15 percent discount on those because there is no GST, and yet those retailers down on Main Street, New Zealand, have still got to pay GST. We think that this part of the bill should have gone a hell of a lot further than it has. It is a start. It is a start\u2014we recognise that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere has always been this argument that \u201COh well. It costs more money to police the compliance than what you would collect in revenue.\u201D I do not agree with that in this case. Sure, we are only doing this on online goods, so it is easier. It does not place an impost on the Customs Service to handle physical goods in any way, shape, or form. But what it is, in effect, doing is burying our heads in the sand and saying that this is too difficult, or we don\u2019t really care about middle New Zealanders who own the retail shops, who are competing with these offshore multinationals.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt was a classic case. Part 3 of the bill provided the Government with the perfect opportunity to actually level the playing field, and that is all\u2014not tilt the playing field in terms of New Zealand suppliers or retailers, but just level the playing field for New Zealand retailers. Instead, what I believe it does is it actually tilts the playing field towards the large multinationals, as opposed to the good, hard-working middle New Zealand families who own the retail stores and who are missing out on these things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000426\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe hear time and time again how people have bought a fantastic book on Amazon, or they have bought something from Abercrombie and Fitch, or any nature of goods over the internet. It is becoming part and parcel of the way we shop. One of the reasons why New Zealanders have embraced this form of retail therapy is that it is cheaper\u2014it is cheaper. What we are talking about here is not tangible goods and services that cannot be bought in New Zealand. If that were the case, you could sort of understand that. You know\u2014\u201CI can\u2019t buy this down here. The only place I can buy it is overseas. Therefore, I\u2019ve got to.\u201D Well, that sort of makes sense. But when the same goods and services that you can buy downtown you can also buy on the internet for a 15 percent discount, first and foremost, because there is no GST, then that is plain wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe Inland Revenue Department admits, as does everyone\u2014and I suppose this is a common theme throughout the speeches today\u2014that a tax system has got to be fair, it has got to be efficient, and it is got to be simple. This part of the bill misses a great opportunity to address a real problem we have got in retail New Zealand\u2014that is, GST should be charged on online tangibles.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u0022953fde9d4088435eb6dd0842c6462a5a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022953fde9d4088435eb6dd0842c6462a5a\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E I want to talk first about the good bits of Part 3 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill and then about the bits that have not been dealt with. The thing that is good is that we are taking a step forward here in understanding the new way that commerce is done. You know, it has taken us a little while as a Parliament to catch up with that, but the truth is that there will be very few parliamentarians and very few people listening to or watching the debate tonight who have not bought something online in the last year or so. It is now a very core part of how we do shopping. Everything, from booking holidays to downloading your favourite tunes on to your iPod to use when you go out for your walks\u2014all of those things are now part and parcel of daily life, and so it is important that if we are to create a fair tax system that we begin to look at that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWhat this piece of legislation does, as my colleague Stuart Nash has said, is deal with what are called remote services or intangibles, which are, essentially, e-books, music, videos, and software that we purchase from offshore websites. So it is an important thing, and there were certainly strong submissions made to the Finance and Expenditure Committee from people who do provide in that area. The easy one is to think about the difference between Netflix and Lightbox, with Netflix being the international, offshore provider of streaming television services and Lightbox being the one provided ultimately by Spark, a New Zealand - based company. Those two companies will now be treated fairly under this piece of law, and that is good for GST purposes. That is an important step forward for us and one that the Labour Party does strongly support. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWhere our concern arises is that the opportunity has been missed to then take that to the next logical step, and that is around tangible goods. The reason why it should have been taken now is that we are now setting up a very, very unfair situation. If I want to go out and buy a birthday present and buy a book and I go on Amazon\u2014I personally do not own an e-reader, but I prefer hard-copy books; I prefer to hold on to books and read them\u2014and order online a hard-copy book and it comes into New Zealand for me, that is not going to create a GST obligation. But if I download it as an e-book to an e-reader\u2014if I did have one\u2014then it would. That is the unfairness that retailers in particular across New Zealand have rightly come to the committee on and said: \u201CGood on you for taking one step forward.\u201D But if we really wanted to support New Zealand businesses, and if we really wanted to support those main street retailers, as Stuart Nash called them, then we would have taken that extra step. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe arguments that were raised when we raised this in the select committee were largely around compliance and around the cost of that at the border. But I actually think the wherewithal is there for us to step beyond that, if we are serious about having a fair tax system. It was disappointing to us that some of the very, very good submissions that came through to the committee, particularly from the retailers, were ignored by the Government. It is this part of the bill where we feel that the missed opportunity is the greatest, because this was the chance to create that truly fair base to our tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere are rules that have been put in place. My colleague Stuart Nash mentioned before that the supplier of remote services to New Zealand consumers has to exceed $60,000 worth of services in a 12-month period. That will capture those larger providers, but the truth is that in terms of the ones that could really be effective for New Zealand we are not going to be reaching those because the system does not go beyond the intangibles. The suppliers of remote services by non-resident suppliers to New Zealand will not be subject to GST unless the supplier and recipient agree otherwise, in which case the supplier will be zero rated. The supplier will then be able to claim back any New Zealand GST costs in making zero-rated supplies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAnother change that has been made is that offshore suppliers will be required to determine whether a customer is a New Zealand resident, on the basis of two non-conflicting pieces of commercially available evidence of residence. So we have to prove here that someone actually is in New Zealand, for GST purposes. Those sorts of rules are useful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe Commissioner of Inland Revenue has got some discretion when working out whether someone is genuinely in New Zealand. I do know, from some of the work that was put in front of us at the select committee and from the reading that I have done, that those suppliers at the other end of the chain\u2014the Amazons, the Apples, and so on\u2014feel that sometimes with some jurisdictions it is quite hard to establish exactly where somebody is, particularly now around the way in which telephone numbers can transfer across borders. So the idea that a billing address and a country code of a mobile phone SIM card are required to be able to establish whether or not somebody is actually resident in New Zealand is important. It is less of a problem in New Zealand, I suspect. I do not think New Zealand phone numbers are used in quite the way that some other phone numbers are, but that is an important aspect of deciding whether or not somebody falls under the provisions here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIf a GST-registered business is inadvertently charged GST it will have to seek a refund from the non-resident supplier. However, if the payment for the supply is $1,000 or less, the non-resident supplier will have the option to provide a tax invoice to the purchaser to allow them to claim a reduction rather than to refund the GST charged. This was raised in the committee by some submitters as effectively being a base threshold for involvement within this regime, and again we were happy to accept that as providing the appropriate level of compliance burden. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAs I said, the Commissioner of Inland Revenue does have the discretion to require a person to register and pay GST in cases where the person provides false or misleading information about themselves in order to avoid GST, if the GST amount involved is substantial or the behaviour is repeated. There have been concerns, again, about where people appear to have a company that is based in New Zealand but, actually, they do not. This has not yet become a major issue, but it could if somebody was genuinely working very, very hard to avoid their GST obligations. We need to find a way, and the committee felt that the Commissioner of Inland Revenue deserved a level of discretion to be able to deal with that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere are a series of things in here that are useful and that will make the system work for tangibles, but I just return to the point that that is only half the story\u2014in fact, it is less than half the story because it is the movement of tangible goods that has the biggest impact on New Zealand businesses. There are good, solid retailers across New Zealand that are struggling to compete with people because they are not being treated the same way. To me, that is a fairly basic principle of what our job in Parliament is: to set the rules so that there is as level a playing field as there possibly can be. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe Government is right in bringing forward a bill that makes that playing field level for those who supply intangible goods\u2014digital goods. It is right to do that. But it has completely let down those who work hard every single day in the retail sector of New Zealand by not doing the same thing for tangible assets. It is not as hard as the Government is making out. This can be done with the appropriate thresholds. We always accept that there will be a threshold below which you do not go because compliance costs are too difficult, but at the appropriate thresholds we could be supporting New Zealand small businesses today through having a piece of legislation that gives them the same GST treatment as their counterparts overseas. Government members might want to stand up, take a call, and tell us why they have not done that, because in the absence of someone explaining it, we have a piece of legislation here that is letting down a group of New Zealanders.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022 data-id=\u00221cc5d3855ac24540b5f1f0b306a5fe12\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221cc5d3855ac24540b5f1f0b306a5fe12\u0022\u003EFLETCHER TABUTEAU (NZ First):\u003C/span\u003E It is a pleasure to rise, actually, in support of this part of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. As I have said before, there are good parts to this bill, and this is one of them. Part 3, \u201CAmendments to Goods and Services Tax Act 1985\u201D\u2014we absolutely support its intent, but, as noted by several speakers on this side of the Chamber, it does not go far enough.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EWhy do we say that? New Zealand First and I acknowledge that peers all across the Committee will have been consulting with businesses. We know that businesses have been waiting for a long time\u2014probably 9 years, to be fair\u2014for this Government to actually act to level the playing field to ensure that small to medium sized enterprises in New Zealand, in particular, are able to compete with big business from overseas. That is, essentially, the summation of the competition game we are talking about here. We are talking about small to medium sized enterprises that are suffering based on the fact that they must comply with their GST obligations, whilst those predominantly large overseas international corporates sell their goods into New Zealand, and for the last 9 years\u2014as a random selection of time\u2014those corporates have not been required to pay their GST obligations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EThe submissions to the Finance and Expenditure Committee were very clear and consistent. Each and every submitter who spoke on this part of the legislation said that \u201CIt was past the time to do something. We are grateful for what you have started to do for small to medium sized businesses in New Zealand.\u201D So New Zealand First could not agree more with what I would class as kind of like the first step in part of a solution, because, as has been noted before\u2014and I cannot say it emphatically enough\u2014this is not the whole solution. It does not go far enough, and the arguments as to why we should not implement GST on all goods and services from merchandise traders, and tangible goods as well as these intangible, or\u2014what is it called\u2014\u201Ccross-border \u2018remote services\u2019 provided to New Zealand-resident consumers.\u201D are half-hearted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EA classic example is when I go and download a CD from some online music store. [Interruption] Download an album\u2014thank you, everyone. There we go. This is remote services\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267c1ece4d8224419865f6bf26963f5b3\u0022\u003EKris Faafoi\u003C/span\u003E: I thought you were old school.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220d5492dffd6c4e5fbf556b9a1a7b2a0f\u0022\u003EFLETCHER TABUTEAU\u003C/span\u003E: \u2014I am old school\u2014to New Zealand residents, and we are obliged to pay the GST. But if you buy the CD and get it mailed to you, for some reason you are not obliged to pay the GST on it. It is nonsensical. It makes no sense, and so\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed52fdb31ce14021b59629f733dc4fa7\u0022\u003EDavid Bennett\u003C/span\u003E: Get a gold card and you won\u2019t have to pay anything.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b3c6fb15626e4a0ba738cd52c10c415f\u0022\u003EFLETCHER TABUTEAU\u003C/span\u003E: Good idea\u2014get a SuperGold card and you might get a discount on it. Thank you, Mr Bennett. We need to apply GST to all goods and/or services\u2014intangible or tangible merchandise\u2014that come into the country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e11a5f05-1940-41b2-8f1e-911dba7a43a5\u0022\u003EThe Government, for some reason, has put up an argument around insufficient funding for the Customs Service, or it not being geared up adequately to address the issue, but we were told by Retail New Zealand, for example\u2014it was only one group that put the numbers in front of us\u2014that the top 20 online providers in terms of online stalls around the world, offshore international corporates, account for 86 percent of New Zealand activity in terms of purchasing online. What we were further told is that those companies are required to comply with GST or VAT obligations in many diverse parts of the world, so they have point-of-sale software systems geared up, ready to go, to implement GST on intangible and tangible goods. They literally have to click a button and that practice of applying GST to the sale of goods to be shipped to New Zealand is enacted. At the point of purchase, a New Zealander will pay the GST component. The offshore entity will account for that in its accounts and make its GST obligations paid, because all of them, as all in the room will know, are above that $60,000 threshold. So companies are there, they are ready to do it, and the arguments against it are not sound.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022 data-id=\u0022f900efa8178d4514ae8de81b17185231\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f900efa8178d4514ae8de81b17185231\u0022\u003EALASTAIR SCOTT (National\u2014Wairarapa):\u003C/span\u003E This is a short call on Part 3 of this bill, which refers to GST. GST is a very good way of collecting tax for the Government because it is broad-based, there are no exemptions, and it is a disincentive to consume. It taxes those who consume for goods and services, so it encourages, in other words, people to save and invest, which is, of course, why GST was increased from 12.5 percent to 15 percent at the time. Of course, it enables the Government to reduce direct taxes, which is essential if you want people to work harder, earn more, and become more productive. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003ESo I just wonder what might happen once we see the universal benefit that is proposed by the Opposition. I wonder where GST might go to if we all got paid $11,000 on the day. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EI would like to come to the bill, which talks about the goods and services tax relating to cross-border services and intangibles, with the refinement in the Finance and Expenditure Committee to make it a little bit easier in regard to people who provide services on a collective basis. I am talking about insurance, where you might have a group of people in a country or around the world supplying insurance to a base of people in New Zealand. Prior to the select committee process every one of those suppliers would have had to register for GST and collect and pay GST. It has been a positive improvement in the select committee where those offshore people can use an agent and be represented by one entity, so enabling the tax to be collected by one agent and returned to the New Zealand Government. That is a very positive improvement. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EThe other positive improvement through the select committee that I would like to mention is around the choice of zero rating for those offshore companies that are dealing with New Zealand companies that are GST-registered, obviously, in New Zealand. That offshore company can automatically say \u201CWe are to be zero rated and, therefore, there\u2019s no need to collect any tax.\u201D, because there is no tax on a GST-registered business in New Zealand. We are aiming only to collect tax that would otherwise be paid by consumers. This is very much focused on the New Zealand consumer who purchases these intangible goods and services from offshore suppliers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EThe Opposition talked about some discussion around tangible goods. It is not true that tangible goods are exempt. There is GST taxed and collected at the border. I think the Opposition is referring to the threshold that applies to tangible goods, so there is discussion. Of course, if you had a zero threshold or a very low threshold, that would be a loss-making venture for the Government because of the transaction costs that are involved in that work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EOf course, there is work to be done on the tangibles, but that is not part of this bill. This bill focuses on the intangible services, and that is only going to be growing as we purchase more and more Netflix, online films, and data. More and more data is going to be travelling this way, and this is a very simple way of collecting what is, quite rightly, GST that is paid by the New Zealand consumer and is currently not being collected. As a result of this bill, it will be collected. This is a positive approach to GST legislation. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022 data-id=\u00227f5a5bea0b7a4d6cb80fed35a253f896\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227f5a5bea0b7a4d6cb80fed35a253f896\u0022\u003EKRIS FAAFOI (Labour\u2014Mana):\u003C/span\u003E I rise to take a call on Part 3 of this piece of legislation, the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. Before I look towards a specific clause I do want to just point out one thing that the previous speaker, Alastair Scott, said. I am going to have to look back at some of the media reports at the time when the National Government increased GST from 12.5 percent to 15 percent, because I did not see it pushing very hard that GST had to go up to incentivise savings. I do not remember that being one of the John Key lines\u2014\u201CWe need to increase GST so more Kiwis will save.\u201D I will come back to the Committee and see how that Google search goes for how many times the Prime Minister or the Minister of Finance said that GST had to go up so Kiwis could save more. \u201CWe do not want people to spend so much\u201D\u2014God forbid we go out there and buy food\u2014\u201Cso GST has to go up from 12.5 to 15 percent.\u201D That was what the member who just resumed his seat said.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a132c588e92f4637ab06605bcc6728e3\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Yes, well, come back to the bill now.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229d888f39552e4305a7f52e237efdba17\u0022\u003EKRIS FAAFOI\u003C/span\u003E: I do want to go to clause 48 of the bill\u2014it is something that no one else has raised\u2014and subclause (1), which inserts a new section 5(10B) in the Goods and Services Tax Act. I think the Minister in the chair may take some interest in this. For the benefit of the Committee, that says: \u201CFor the purposes of this Act, when a person who is resident in New Zealand pays an amount of money to participate in gambling or in a prize competition through a supply of remote services\u201D\u2014which have already been described in this debate\u2014\u201Cthat are physically performed outside New Zealand, the payment is treated as a payment for a supply of services by the person who conducts the gambling or prize competition, as applicable.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EIn English that means that if someone resident in New Zealand were to go and gamble on a race on an online betting site based in Australia or in the UK, currently, my understanding is there is no GST charged on that bet. If they were to use their phone and place a similar bet on a race here in New Zealand, they are charged GST. So there is a disparity between the experience with the New Zealand TAB, which we all know as a place to go and put a bet on, and overseas betting websites that take bets from New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThere was a submission from the New Zealand Racing Board\u2014and I think this is a good part of the legislation\u2014where it talked about the imbalance there, and some revenue that the Racing Board could be missing out on. If I can turn to the submission from the Racing Board, because I think it is a good one, point 4.1 said that the Racing Board estimated that New Zealanders are betting $58 million annually\u2014and that is 15 percent of the total betting expenditure by New Zealand\u2014on overseas websites. It went on to say that \u201CThe New Zealand community receives no benefit from this activity,\u201D\u2014because all that money goes overseas, there is no GST, so none of it comes back to New Zealand\u2014\u201Cbut does incur any costs associated with problem gambling.\u201D It went on to say that it has calculated that the loss of GST revenue on that $58 million could be close to $8 million. So the forgone revenue from not charging GST on bets placed on overseas gambling websites could be close to $8 million, which the Government would miss out on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThe Racing Board believes that if that money went back to New Zealand, then not only would there be, obviously, that $8 million for the Government in revenue but also sports\u2014the likes of rugby, rugby league, basketball, and cricket, which do allow sports betting on their events\u2014would get an additional $5 million of that $58 million because the Racing Board pays them a fee on those events. The racing industry itself would get close to $40 million more if that revenue was staying here in New Zealand, which, I think, within this piece of legislation, is a good thing. It is my understanding that GST will now be charged on betting on overseas websites. The Racing Board went on to say later on in its submission that GST was a factor in this differential in competitiveness and that \u201CIn this respect NZRB is no different to any other retailer in suffering a competitive disadvantage in being required to charge GST while offshore providers do not.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI think that this is a good addition and a good change to the piece of legislation, because it does give that New Zealand entity\u2014the TAB or the New Zealand Racing Board\u2014the ability to take away that competitive disadvantage that it is experiencing with the leakage of the betting money going overseas. It is not just an issue around GST. I think they are now predicting that it is somewhere around $500 million that we could lose over the next 5 or 6 years from the sports betting industry itself\u2014and a big chunk of that, obviously, is in the racing industry\u2014if we do not attend to the issue of leakage from New Zealanders betting on overseas websites. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003ECan I turn now to the other issue around retail in general that has been raised by other members on this side of the Chamber. I am a bit of a laggard. I like to see and feel things when I buy them from the shop. I do not buy a lot online, unlike Fletcher Tabuteau, who, I believe, downloads his CDs online. I do not know how that happens\u2014maybe he has got one of those 3D printers and that is how he does it. I do not do a lot of online shopping. I like to support local business and make sure that I can see things and that they fit. Or books\u2014like my colleague Grant Robertson here, I like to hold the book. I do not like to have a tablet or something to read the book. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI think that this piece of legislation that we see here today is a start, but it misses a trick because it has not gone far enough. I think Retail New Zealand, in its submission, made that point strongly, in that, yes, we have made a start with these intangible goods or intangible services\u2014the likes of Netflix. I think that the likes of Spark will be happy because its alternative, Lightbox, was charging GST, and, again, like the TAB example\u2014that puts it at a competitive disadvantage to the likes of Netflix, not only with its content\u2014which has arguably a bigger range, so there is a competitive advantage there, but also with its pricing. It is having to price with a GST component worked into its pricing, which was not so for the likes of Netflix. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EMy mother always was a good gardener. She said that if you start a job, do it properly. That is why she never let me do the garden, because I would never do it properly. I think that we have got another example of this here, in this piece of legislation. It is a good start, but we have not gone far enough to make sure that we are looking seriously at the issue around the tangible goods that could be picked up from online purchasing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI pick up on the point that many other people on this side of the Chamber have made, which is that online purchasing has worked to the detriment of retail\u2014certainly in my area of Mana, where I think we have seen some retailers really struggling on the street now, because people are looking offshore because the range and the price may be better. Retailers may have to deal with that, and look at how they compete product to product, but when you are looking at a 15 percent price differential, that is hard to go up against. I think that is probably why you will see an increase in the number of people like me\u2014I might have to start looking at shopping online as a more serious option. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EBut I think that we need to cut those small to medium retailers a break, as was submitted by Retail New Zealand, and say that if we are going to start this process, let us do it properly and not just take the low-hanging fruit of the intangible services, which is contained in this piece of legislation. Let us do it properly and look at how we deal with this issue to make sure that small businesses that do want to set up in our cities and in our towns do not have a massive disadvantage there. I would like to maybe ask a question of the Minister in the chair, Nikki Kaye, about what work has been done and how much priority this Government will put on that continuing work\u2014which, I think, is the hard stuff, instead of just concentrating on the easy stuff here, which is the intangibles\u2014to make life better or easier for those retailers in our small towns and in our cities.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00222812a39e557843c9a93600f8ceb94e3b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222812a39e557843c9a93600f8ceb94e3b\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E I just want to build a little bit on what Mr Faafoi said in his first contribution. It is generally recognised that GST should apply evenly across all consumption. GST is what they call, basically, a tax on domestic consumption. There is a destination principle, which means that you tax the good or the service in the country within which it is consumed. It makes sense; we all understand that. That is why this tax has been brought in, and this is why we do have such a problem with the non-taxing of tangibles when we think we could have gone a lot further. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne of the interesting things that the Inland Revenue Department (IRD) commented on\u2014it said: \u201CThe proposals could impact on the level of competition by discouraging offshore suppliers from entering or continuing to supply to the New Zealand market. However, this impact may depend on the extent to which compliance costs are imposed on offshore suppliers and the extent to which consumers alter their purchasing behaviour in response to the change.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI do not know whether that has been put in as an advantage or as a disadvantage. I would say that if this sort of law encourages New Zealanders to actually purchase domestic intangibles, which is what we are taxing here, then surely that is not necessarily a bad thing. What we absolutely want to do, I would have thought, is to encourage New Zealanders to purchase domestically. In fact, as mentioned, one of the principles about this is fairness and equity. The IRD talks about fairness and equity a lot. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne of the things that came up a lot in the Finance and Expenditure Committee was the effectiveness and fairness of this option. We talked long and hard about this. One of the big questions, I suppose, is: would offshore companies actually pay this? How could we be sure that a Netflix or an Apple, or any other large supplier\u2014officials reckon it is about a hundred companies\u2014would actually comply? The interesting thing is that when we looked at overseas examples, we were told that particularly large international suppliers account for the majority of these cross-border services. I think that if we think of Apple and downloading iTunes etc., that is probably right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe were told they have a willingness to comply, and we were told that for these suppliers, failure to comply with their obligations would pose a significant risk to their reputation, which, I suppose, could be right. But it is an interesting comment when you consider that the Googles of this world\u2014and Facebook and Apple\u2014do not pay any tax anyway. They do not seem to care that their reputation may be sullied because they do not pay tax in a country, because they live on the strength of their brand. They have all got massively valuable brands, and it is why they can get away with paying no tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhere this sort of fell over was Starbucks in the UK, when it was actually shamed into voluntarily paying more tax because there was a consumer boycott of its stores. That is the power, I suppose, of consumer action. But I doubt\u2014and I could be wrong here\u2014that companies like Apple, like Facebook, and like Google really care about their international reputation in New Zealand on whether they pay tax or not. That may change when a lot of the OECD work on base erosion and profit shifting comes to fruition, but at this point in time I think what they care about is the goods and sales that they can sell into the country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI would like to talk about the impact of this and some of the underlying data around it. There is an acknowledgment\u2014and I think it is fair enough\u2014that because of data limitations it is not possible to accurately determine how many offshore suppliers may be required to register and return GST, but from experience in similar countries, the IRD has calculated it is probably around about a hundred offshore suppliers that may register for GST. Again, owing to the data limitations, we just do not know the value of offshore purchases and how much money this will bring in or how much we are missing out on. Again, the best estimate of the IRD officials is around about $270 million of purchases. It is quite a lot, when we think about it. Those are purchases of services and intangibles. We are not talking about tangibles here; just online stuff. The estimate means that there is around about $40 million of GST that is forgone in these purchases, and, again, there is an estimate that online purchases have grown by about 10 percent. Is it not interesting? We think that there is $40 million in forgone GST, and this is only on intangibles. Imagine what it would be if we charged GST on tangibles. I think you would find it would be at least double that.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022758dcaf3-9976-43ac-8593-79f66ee4da22\u0022 data-id=\u0022be5412ddc7c543e9884669d1b3549fa4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022758dcaf3-9976-43ac-8593-79f66ee4da22\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022be5412ddc7c543e9884669d1b3549fa4\u0022\u003EJOANNE HAYES (Third Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u002253672b486a6b4fa9929d65381fef3fae\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002253672b486a6b4fa9929d65381fef3fae\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E In many ways, my contribution picks up from where Stuart Nash left off. It is perhaps a little unusual what I am going to do, but I am going to focus this contribution on one particular submission, because I think it is important that it is on the record of the House, and the Minister in the chair, Michael Woodhouse, may have something to say about this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThree options were considered of how to implement the GST on intangibles, and the one that was the officials\u2019 option, which is what we have now got in the legislation, is what they call offshore supplier registration. So this is, effectively, that the companies we are talking about are registered for GST and it puts the onus, in a sense, on them. It deals with them by means that are appropriate and are used by other countries. In the regulatory impact statement it talks about the European Union, Norway, South Korea, Switzerland, Japan, and South Africa, which adopted this kind of option. They register and they return GST if their suppliers are over the $60,000 mark, and it is endorsed by the OECD guidelines. But other options were considered, and, in particular, the one I want to refer to was what was option three in the regulatory impact statement\u2014that is, the question of whether there could be a payment-based GST collection system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI want to say at the outset that I am not necessarily advocating for this, but I do think it is an option worthy of some consideration. Essentially, what is proposed there is that under a payment-based GST collection regime, when remote services are supplied the supplier does not actually necessarily have to be involved in the collection of the GST on behalf of New Zealand, in this case. Instead, you could actually use the bank or the payment supplier, if it was not a bank\u2014if it was a sort of a PayPal or something like that\u2014in the country where the person is resident, and it would add the GST to the value of the incoming transaction. How that would, effectively, work is it would debit the GST amount from the person\u2019s bank or credit card and retain the GST information with the transaction for future reference. Pretty much all of these purchases are now made using a credit card online, and, obviously, as the GST is collected, it would be forwarded on to the Inland Revenue Department (IRD) using the existing mechanisms that the bank and IRD have for working together. This submission was put to the Finance and Expenditure Committee by Miles and Associates Ltd, and I just want to mention, in the interests of transparency, that it was the organisation that came to us and put forward this idea. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere are some immediate benefits that are easy to think about, which are that it is a simplified design, it does not require reregistration all the time, it uses the mechanism that we all know is used in the way that purchases are made, it simplifies the overall approach that is being taken, and it probably captures an increased amount of revenue, potentially, because the registration process does mean that some suppliers will not be registered. In my earlier contribution I talked through the fact that there are fines involved for people who do not register and that the Commissioner of Inland Revenue can chase that up. But, again, you do not know what you do not know, and it may well be that some people will slip through the cracks. So having a payment-based approach for implementing the provisions in Part 3 would potentially add to the amount of revenue that people could get. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere are no additional costs to New Zealand businesses that are exporting goods and services going the other way if you adopted this regime across the board, and the seamless handling of goods\u2014you can expand this out to the tangible sector more easily as well, which is another point that many people would like to see happen. It creates a neutral set of relationships between businesses, if businesses are importing goods, by putting it only in the hands of the payment providers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI am not saying it is simple and I am not saying that it has even really been tried anywhere else, but it is the kind of option that as we look to the future of how we are going to create the level, fair playing field for taxation in New Zealand, we should be considering. It was a little bit unfortunate, to my mind, that the submitters had, in fact, already submitted when the IRD\u2019s discussion document came forward. The committee did not consider that submission in detail, and I just want to put on the record that I think it still deserves consideration.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022 data-id=\u0022e65b5e17ad9448178784c7f192c6ba62\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002261720d2e-5b1d-4742-b4f0-30424316ccc1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e65b5e17ad9448178784c7f192c6ba62\u0022\u003EBARBARA KURIGER (National\u2014Taranaki - King Country):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022e91208ba95af45c6ab749f46af8a4e8f\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 63\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 59; M\u0101ori Party 2; ACT New Zealand 1; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 58\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 32; Green Party 14; New Zealand First 12.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000481\u0022\u003EPart 3 agreed to.\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000482\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022e0c11baca3f744659b286daea90217e4\u0022\u003EPart 4  Amendments to Tax Administration Act 1994\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022fb74d23333844e34b9e1154eddca1fb4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fb74d23333844e34b9e1154eddca1fb4\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E I stand to talk to Part 4. It is largely technical in nature. It is the amendments to the Tax Administration Act 1994. Whenever we have a tax bill through the Finance and Expenditure Committee and it passes through the House, there are always amendments to the Tax Administration Act because, as the title suggests, it is the Act that governs the administration of the tax system. It just makes sense that when the tax system changes, then so does the administration of that system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere was not that much that was contentious under this part. I suppose that one clause there was a number of submissions on was clause 71, \u201CSection 24B amended (Offshore persons\u2019 bank accounts and tax file numbers)\u201D. There were a number of submitters, including Chartered Accountants Australia and New Zealand, New Zealand Racing Board, PwC\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227c3c3aa5c8874b50ab7a8dff995b034e\u0022\u003EDr David Clark\u003C/span\u003E: PwC?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227578001639004dcf8086c45c1e526ad8\u0022\u003ESTUART NASH\u003C/span\u003E: Well, good point. I wonder why it submitted. We could take a deeper look at that one.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIn a similar vein, in clause 71, is the requirement for an offshore person to have a New Zealand bank account number in order to apply for an IRD number. Again, there were submissions from Chartered Accountants Australia and New Zealand, Corporate Taxpayers Group, KPMG, and OliverShaw Ltd. I must admit\u2014and I do not mean to curry favour with anyone\u2014whenever I see a submission from OliverShaw, it tends to be the first one that I read because those two gentlemen who are the partners in OliverShaw know a little bit about the tax system. I think Robin Oliver is\u2014is there such a thing as a master taxation expert? If there is, then Robin is one of those people. He is that rare individual who takes absolute joy in poring through tax bills in minute detail and finding the errors and places where things can be changed, and all power to him. Without someone like Robin, I think a lot of things that are not that pragmatic would disappear, but he is very much a pragmatist as well, and he understands the role of tax legislation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat this clause is about is that from 1 October 2015, which is when the brightline test came in, a person who is an offshore person, or a resident withholding tax person, must have a functioning New Zealand bank account in order to apply for an IRD number. The requirement to have a New Zealand bank account is part of our anti - money-laundering identification verification requirements that apply only to offshore persons, and it was introduced in Budget 2015 in the suite of changes to tighten up our anti - money-laundering rules. Unfortunately, in that Budget it did not have anything about offshore trusts or anything like that. I suspect we know the reason why, but that is beside the point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd9799a41d8f4a5e98c43b6ee46d0244\u0022\u003EHon Michael Woodhouse\u003C/span\u003E: Why is that, Stuart?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022efa172fe056946fa9e89317f6671d9b0\u0022\u003ESTUART NASH\u003C/span\u003E: Well, because it was unknown, Minister, and the interesting thing is\u2014now that the Minister has asked that question, I feel bound to respond, because the Minister actually said in the media that New Zealand does not have a problem with multinational companies not paying tax. The interesting thing about that is the Obama administration, the Cameron Government, and nearly every single OECD country has identified the fact that there actually is a problem; it is the solution they are grappling with. We know the problem, but apparently our Minister of Revenue believes that we are the only country in the OECD without a problem.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002280a0fbec30a84cd49d8c6bebc93c503f\u0022\u003EDr David Clark\u003C/span\u003E: It doesn\u2019t mean the Government doesn\u2019t have a problem; it means the National Party doesn\u2019t have a problem.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022879591ee0469430b906f0e9630252b09\u0022\u003ESTUART NASH\u003C/span\u003E: Oh, maybe that is what it is, Mr Clark. But we do have a problem, and, unfortunately, what has been shown in recent days is that our tax system has come under increasing pressure\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220f1581864b304625b7595bccebb174e5\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Order! Come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ec468582b6ca40b88b988f290fc24267\u0022\u003ESTUART NASH\u003C/span\u003E: Sorry, Mr Chair, I was just responding to the Minister\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e3aa5fde0db64d1faa97705b6aa3d178\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: No, no.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e72b555860e43d0a6e6374185947ce2\u0022\u003ESTUART NASH\u003C/span\u003E: Oh, OK.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac0be307f1024b35a148c18ed0d35974\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229fe52b06697e48a2a8a71e385c208438\u0022\u003ESTUART NASH\u003C/span\u003E: Yes, sure. What I was saying is that this comes into\u2014any more comments, Minister, you would like me to answer on? An offshore person\u2014this is basically for anti - money-laundering rules, which are incredibly important for the integrity of our tax system. We talked about the fact that an individual will be an offshore person for the purposes of a bank account requirement if they are not a New Zealand citizen and they do not have a residence class visa. We talked quite a bit about this because there are certain residents like Recognised Seasonal Employer scheme workers, who come into the country and are here for about 3 months. They earn very little in the scheme of things, to be honest, and we asked whether they needed to have a bank account. I think, in the end, we did not require that they had to have a bank account.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022927a65f72a614bcb8ea483aa3e8839e9\u0022\u003EHon Michael Woodhouse\u003C/span\u003E: No, they do.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022305684f89d7b45c891a7d290ca14fe1e\u0022\u003ESTUART NASH\u003C/span\u003E: They do?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229b8bb5b538ec4410ba588d44bc3a30a3\u0022\u003EHon Michael Woodhouse\u003C/span\u003E: Of course they do.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f612a9a1fa0446478193efb4e9d6815a\u0022\u003ESTUART NASH\u003C/span\u003E: Well, hmm. We talked long and hard about this, and there was a very good discussion between the expert advisers. But, anyway, a New Zealand citizen will be considered an offshore person\u2014we have discussed this\u2014if they are not present in New Zealand and have not visited in the past 3 years. But, as has been out outlined in another part of the bill, all a New Zealand resident has to do is enter the country on holiday, show their passport, and out they go again, and that is scrubbed. It is very easy to get around this if you are a New Zealand passport holder.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022 data-id=\u0022a1556295bdc34d13ad45cc508616c01a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a1556295bdc34d13ad45cc508616c01a\u0022\u003EDr DAVID CLARK (Labour\u2014Dunedin North):\u003C/span\u003E I have been waiting for a while, so I appreciate getting the call. This part of the bill, of course, tidies things up, as my colleague Stuart Nash has pointed to, and I want to speak specifically to new section 24BA(1C) in clause 71, which relates to when there is no requirement for the normal procedures to apply in respect of due diligence in terms of anti - money-laundering. I will read it out for those who are following this outside the House: \u201CSubsection (1) does not apply to a person for whom a reporting entity under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 has conducted the customer due diligence procedures required for customer due diligence under that Act and regulations made under that Act.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003ESo this is an exemption we are talking about in the law for people who have already complied with anti - money-laundering and countering of financing of terrorism procedures. We would understand that often these kinds of exemptions are in place to avoid duplication. That is why these kinds of exemptions are in the law. But I raised this in an earlier stage of the bill, and I want to raise it here again, because again we have a similar instance where we have a piece of law in place designed to make sure that there is not duplication of a service, and I would like to ask the Minister what checks and balances are in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EOn the one hand, there is the juggling of the intention to make sure that we have people paying their fair share of tax, so we want to make sure that the rules are fair and persistent and catch out those who would wish to do wrong. On the other hand, there is the balancing act where we do not put undue compliance burdens on people who would want to trade and do business with New Zealand. The question that is raised here, as in the previous part of the bill, is whether we have got that balance right. That is all drawn into particularly sharp focus today, as we have just learnt that the Prime Minister has some tax interests that we previously did not know he had, or that he uses a vehicle\u2014and I am only just catching up on the detail of what was declared in his\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002203308270a3744b569d1ef32d169791c1\u0022\u003EKris Faafoi\u003C/span\u003E: So is he.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022752237055ba74d0d90fa5e16fdeb36d2\u0022\u003EDr DAVID CLARK\u003C/span\u003E: \u2014register of pecuniary interests, and so is he, by the sound of it. His tax affairs seem to be more complicated than even he realises, and I am sure we will hear more to come on that. But over recent days, and probably more pertinently, we have seen the Panama Papers come out, and they raise serious questions about New Zealand\u2019s integrity and the integrity of our tax system, and our reputation, more than anything else. We heard the Prime Minister, of course, say immediately that $24 million\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a0d1a55dfee94ee1a727cc1a30b49442\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b214a82e40b043b59eea8de69bf1d532\u0022\u003EDr DAVID CLARK\u003C/span\u003E: \u2014was raised. I will come to the point\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022caad76b30f8445fa8864af1f43daccaa\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Yes, back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225635b04aaf4f47c1b2e8fdbb36212822\u0022\u003EDr DAVID CLARK\u003C/span\u003E: \u2014which is about whether we have the correct measures in place in new subsection (1C) of section 24BA, whether the tests in place are stringent enough, whether they are avoiding unnecessary duplication, or whether they in fact too lax, because we are finding that New Zealand\u2019s reputation is under threat. If New Zealand\u2019s laws are too lax, we risk having people come through New Zealand\u2019s system who are participating in money-laundering and the financing of terrorism, and that is terrible for our reputation. We have heard that in these Panama Papers there are 60,000 instances\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022842af50d7dc749468977e5269126c3bc\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Order! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002273247d75ef6d47f2b0686ec699558360\u0022\u003EDr DAVID CLARK\u003C/span\u003E: \u2014where New Zealand is mentioned.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022622bf98e066a43f4a9064196a3918a64\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: No, no.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223fb749def97e420fa8f341022879b4b6\u0022\u003EDr DAVID CLARK\u003C/span\u003E: In this bill here\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002235c878be29b844519393810fe28ffb6c\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Order! I have ruled previously. I ask the member to come back and focus on what the bill is about. You can mention those things in passing, but do not spend the whole speech on examples that are outside the scope of the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fa0c964ad1f346f6a6cab021895b851e\u0022\u003EDr DAVID CLARK\u003C/span\u003E: I will bring it back, because the point of those references is to ask whether, here in this bill, we are creating more loopholes. If people have complied with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requirements once, are they exempt for ever? For how long are they exempt? If somebody has proven themselves in one jurisdiction, or in New Zealand, to have complied with the law in that respect, are they for ever protected? If they have arranged their affairs in such a way that it is not detected on the first time through, are they protected for ever? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EIf the Prime Minister\u2014to use a hypothetical\u2014denies having any of this kind of involvement in one instance and it later transpires that he has arranged his affairs differently and he is captured by this, does that have an effect? Is that something that is protected by this bill? Does it have tests that can be applied again and again, or are we saying here\u2014and the Minister will, I am sure, be able to direct us\u2014in new subsection (1C) that this is a once-and-for-all test? Is this a test that applies for ever, into the future, or is this test is a one-off? I think that burden of proof is something we need to look at again.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u00228624c9f91bc64318ad0de3614bc93ca7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228624c9f91bc64318ad0de3614bc93ca7\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E I want to look specifically at clause 71, which contains, as I foreshadowed in an earlier contribution, the amendments that have been included to look again at offshore persons\u2019 bank accounts, in so far as that requirement was put in place in the Tax Administration Amendment Act 2015, which, for those who have been following closely, was an earlier piece of legislation as part of the suite of legislation that the Government has put in place to establish its new rules around resident\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c6aa78323b4f4333b2562cfaed23954b\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003ESitting suspended from 6 p.m. to 7.30 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e859c58c24d247a8a76443d942964c51\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: I will try to make it as interesting and stimulating for the Chair as I possibly can. Part 4 of this bill, however, is about the Tax Administration Act, so we have got only limited material to work with here. But the contribution I was making before the break was around the fact that this is the clause\u2014I am referring here to clause 71 of the bill\u2014where, again, we are amending a piece of legislation that the House passed only months ago, and that was the Tax Administration Amendment Act 2015.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWhat that Act did was create a requirement for offshore persons to have a New Zealand bank account in order to apply for an IRD number. In part, this was to ensure that the anti - money-laundering identity verification requirements that New Zealand has signed up to apply to offshore persons. I am sure everyone in the Committee would agree that New Zealand\u2019s being party to all of the anti - money-laundering requirements that have been internationally agreed is important, because we do not want to see New Zealand out there as an outlier in the world in terms of providing good standards of probity in our taxation and financial arrangements. That would be a terrible thing, and one that we on this side do not think should have any place whatsoever in the way that New Zealand presents itself to the world.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EHowever, after that piece of legislation was passed, it became clear that some of the compliance costs involved in everybody getting a bank account in order to get an IRD number were a little high. Officials went away and came up with some solutions. Some of them are non-legislative and are not covered in here, but they were described to the select committee in some detail. However, some of them are legislative, and they are the ones contained in clause 71. In particular, there was one that was a pretty obvious one, which was around seasonal workers employed under the Recognised Seasonal Employer scheme. Clearly, it would be quite difficult in some instances to immediately get bank accounts\u2014things like identification and all of those sorts of things are a little hard at times to get\u2014so non-resident seasonal workers under the Recognised Seasonal Employer scheme are going to be allowed a grace period of 1 month after arriving to get a New Zealand bank account and inform the Inland Revenue Department before the higher withholding tax would apply. All members of the select committee supported this as being a practical way of dealing with that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe other category of person is a person who has already had anti - money-laundering verification undertaken by a New Zealand reporting entity and would not need to obtain a bank account, to avoid duplication of that process. So, in law, what that equates to is \u201Ca person for whom a reporting entity under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 has conducted the customer due diligence procedures required for customer due diligence under that Act\u201D. There were some questions asked at the committee as to whether that would provide exactly the same level of assurance as somebody who had a bank account, but apparently it is a consideration within all of the provisions of that 2009 Act I mentioned, and, therefore, those people are exempt as well. Then the bill already exempts non-resident suppliers of remote services from the requirement to have a bank account, and the committee has recommended that other non-resident suppliers also be exempt as long as the IRD number was being supplied solely because they were a non-resident supplier of services. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003ESo this all came about because the Government\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224d39ad48aff644b3859251e0666ec453\u0022\u003EHon Ruth Dyson\u003C/span\u003E: How do you know that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022856567868e4c42b3ad90ec82fe338f87\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: Well, it is amazing that I know all of that, is it not?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ea74fa24ff24217a4ff79cb2b505eab\u0022\u003EHon Ruth Dyson\u003C/span\u003E: No, but how do you know why they supplied it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f29d509b0084ae382cb4252366e9a7b\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: No, well the thing is they supplied it\u2014the only reason a non-resident supplier would supply that would be because they were a supplier of remote services to New Zealand, because otherwise they will not have a New Zealand bank account. There is no reason for them to have a New Zealand bank account. They are not an entity operating in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241561188748d494fa077ba214aee69eb\u0022\u003EAlastair Scott\u003C/span\u003E: But you are amazing to know all that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002213b748d379a845fe808e677501764032\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: I know. It is\u2014well, exactly. Alastair Scott could potentially have taken a very similar call to mine, had he chosen to do so. He has not, and I am sure he is grateful that we have now traversed that material. [Bell rung] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f1e6bb9a20b048e1ae0c25859faa67ca\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Grant Robertson.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002218368b05bdd04568a797cbef037e4e3e\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: It will be only a brief addition\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264ca0b4774014861a96cc6fa593e53f1\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Do not apologise. Just get on with it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002293441afba40847c2811b299352ed12b2\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: \u2014to that statement, which is really just to sum up my contribution here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003ESo I think this clause 71 is useful, but it does highlight the shortcomings with the way the Government has gone about this. We are nearly at the end of the Committee stage of the third bill of three. It is a pretty poor trifecta, if you ask me, because in those three bills the Government has set up the brightline test that has not really worked, it has created a series of obligations that it has had to come back to the House and correct, and, in the end, I do not think New Zealanders are particularly better off for these changes. We are supporting them because they are minute steps in the right direction, but, actually, the Government, when it looks back on how it has gone about these three pieces of legislation, will probably want to have a pretty serious rethink about whether it has got it right. We do not think it has, in terms of the issues that are meant to be being managed by the brightline test, but on top of that, if you are making law and then correcting it months later, there is a problem with how that law is being made, and we need to do better than that.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022d2e2ab8cad1a4dc183ebc062f67c3d11\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d2e2ab8cad1a4dc183ebc062f67c3d11\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E Just talking to Part 4, I am going to have a look at clause 72 here. This is talking about residential land withholding tax certificates of exemption. Again, this was an area where we discussed in some detail at the Finance and Expenditure Committee why people would get certificates and what the reasons and the rationale would be, and, basically, there are three of them. What I am talking about, of course, is residential land withholding tax. This is, by and large, covered in Part 2 of the bill, but because this is amendments to the Tax Administration Act it this falls just under the purview of this part. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESo there are three requirements for people who may apply for an exemption to residential withholding tax under this Act, and this includes, in new section 54E(3) in clause 72, \u201Ca person who carries on a business of developing land or dividing land into lots or erecting buildings;\u201D. The reason we did this is that we did not want to, how should I say it, dissuade anyone\u2014an overseas investor\u2014from coming over here and erecting residential dwellings, especially in a place like Auckland, where there is a need for residential dwellings. Perhaps we will reach a stage where it is hard to get domestic funding and, therefore, overseas funding will be a requirement to allow any sort of development to occur, and under this sort of circumstance, we thought that the odds of them\u2014well, it would be easy for the Inland Revenue Department (IRD) to track them down and have them pay their required amount of tax anyway. As we talked about in the purpose of this, we thought that the residential withholding tax is really there to stop people from avoiding their tax obligations, so this would make it\u2014well, we think it would be very hard to avoid your tax obligations if you were undertaking this sort of work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe second area is where they have already \u201Chad tax obligations under the Inland Revenue Acts before when applying for a certificate;\u201D\u2014i.e., this is an overseas investor of good character, they have a track record with the IRD, and there is no reason whatsoever for the IRD to suspect that they might skip the country or not honour their tax obligations. So it is the good track record\u2014it is the good character test, in essence. The good character test is around in a lot of legislation, so we thought that that was appropriate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe third one is \u201Chas complied with all tax obligations for the 2 years before they apply for the certificate, and the Commissioner is satisfied that the person will continue to so comply.\u201D Again, this goes back to what I was talking about\u2014the good character test. There is no reasonable belief to think that this person or this investor\u2014whether that be a person, a company, a trust, or whatever sort of entity\u2014will welsh on their New Zealand tax obligations. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe did think that those three categories were deserving of the ability to apply for an exemption to the residential land withholding tax. Of course, it is not guaranteed. There is a process that has to be gone through, but if an investor fits one of those categories, then the odds are pretty good that they will get one. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is clause 73, \u201CSection 81 amended (Officers to maintain secrecy)\u201D, as well. Actually, secrecy was talked about a lot in the select committee, in a number of instances, and we have alluded to this before in a speech today. It is my understanding, and it was certainly reinforced by the IRD, that there are a number of checks and balances in place in the contracts of IRD employees to make it very, very clear that they do operate under\u2014well, I was going to say \u201Ca veil of secrecy\u201D. What I mean is that the integrity of the tax system and the integrity of the IRD is completely reliant on the fact that an individual\u2019s tax business will be kept absolutely secret. I have absolutely no reason to suspect that that is ever going to be compromised. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIn fact, I was talking to a very long-serving, and just recently retired, senior IRD employee. I asked him whether he thought this was an issue in the IRD at all, and whether we needed to be a little bit tougher on this, to be a bit more transparent, or to put better rules in place, and he said: \u201CNo. Everyone knows that if they break the secrecy clause in their contract, then they are gone before lunchtime.\u201D So there is a pretty good culture in the IRD for this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe rest of Part 4\u2014as Mr Robertson and, I think, every speaker has alluded to\u2014is administration. It is the nuts and the bolts. It is pretty boring, to be fair. Not that tax is boring\u2014how could I even suggest that. What I mean is that compared with the student loan stuff or the land withholding tax\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EPart 4 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000547\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00221ce219cd9c4d42f8bc50002b4a769aef\u0022\u003EClauses 1 and 2\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022 data-id=\u0022c70c51446df5490889057c7e7929296d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c70c51446df5490889057c7e7929296d\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: We come now to clauses 1 and 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002292dfc63cdecf425daad5c6510353e8a8\u0022\u003EHon Ruth Dyson\u003C/span\u003E: Go on, let him take a call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002251c2b78eaabe4bd59bf4fed4efc9fe62\u0022\u003EThe CHAIRPERSON (Hon Chester Borrows)\u003C/span\u003E: Oh, Grant Robertson.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u0022139eeb52d4494458993c4d42a7a0adde\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022139eeb52d4494458993c4d42a7a0adde\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E Actually, you normally say\u2014anyway. I do want to take a call on clauses 1 and 2, the title and commencement clauses. Firstly, to deal with the commencement issues\u2014as is fairly typical in taxation legislation, there are a number of commencement dates. I think it is important for the Committee, whenever it is debating these clauses, that it does take note of retrospective commencement dates, because they are not the best things to have. It is not really the way Parliament should behave. I could now do Chris Hipkins\u2019 speech on retrospectivity, which he often gives when there are commencement clauses, but suffice it to say that the idea that Parliament has the power to be able to retrospectively change people\u2019s obligations and the rules under which we operate in the taxation system is one to be judiciously put in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI do want to point out clause 6 of the bill, which has a retrospective element in terms of the right to cancel a loan contract. That is, in fact, an empowering part of the bill, in that it allows an action by a borrower to be able to do that, and so I do not think anyone here in the Committee would have any particular problem with that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EClause 6 relates to an issue that is going to come up in another taxation bill, which is the great debate about the difference between notifying and formally notifying, which the Finance and Expenditure Committee somehow managed to spend a significant amount of time discussing. Is there, in fact, a difference between notifying somebody of something and formally notifying them of something? Once upon a time, formal notification would come from writing\u2014putting something in a letter and sending a letter. But is an email formal notification? Because it is like a letter\u2014[Interruption] Yes, but is it seen to be a formal communication? I think the general consensus was that that needed to be clarified, and that, actually, is where clause 6 came from, which actually changes the words from \u201Cformally notifying the loan manager\u201D to \u201Cnotifying the loan manager in writing\u201D. So now we are absolutely clear: it is in writing, and that can also be an email, as well, for those who are following along at home. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe other retrospective clause is a very minor one, which I have now completely forgotten\u2014clause 37B, that is right. That is not a major issue, but it relates to the question around when someone has acquired land under the residential land withholding tax issue. The other clauses are largely coming in in the future. There are clauses 37 and 37C, which, again, are around the issues of definitions of residential land and disposal within the 2 years of the brightline test\u2014changing the phrase \u201Cin land\u201D to \u201Cin residential land\u201D. My colleague Stuart Nash earlier identified why that was changed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis, of course, is another example of us having to tidy up legislation. The reason it has a retrospective commencement date is that we are having to tidy up the law that was passed in 2015\u2014that is, clause 37, which is dealt with in the commencement clause, at clause 2(4). Otherwise, the majority of the clauses come into force later this year or in 2017. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000556\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIn the remainder of this contribution, I do just want to refer to the title because, as I have mentioned in previous tax bill debates, often quite innocuous or very general words are used. In this bill\u2019s title we have some specific ones here: \u201CResidential Land Withholding Tax,\u201D\u2014good; a new thing being introduced\u2014the \u201CGST on Online Services,\u201D and the randomly stated \u201CStudent Loans\u201D. I am a fan of perhaps more specific wording in these types of bills, so that people have a better idea of what we are debating. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000557\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EBut, more to the point, there is clearly, for me, some words missing from this title. It would be remiss of me, given the contributions I have made on this bill thus far, to not say that the words \u201CMissed Opportunity\u201D should be in the title, because, actually, that is what this bill is about. It is about the fact that the Government, yet again, has a tax bill it could have brought to the House to make some real and significant changes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe biggest missed opportunity of all is in the GST on online services aspect of this bill, because this was the bit where the Government could have stood alongside small businesses in New Zealand and said: \u201CWe get it that you\u2019re doing it tough. We\u2019re going to level out the playing field in GST. There will be a process and a pathway towards GST being charged at a decent rate in terms of tangible goods brought in from overseas.\u201D But that did not happen, and that is a missed opportunity in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere are other missed opportunities\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022e87493dfcc774caf89c902ee74ee57c4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e87493dfcc774caf89c902ee74ee57c4\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E There is one thing I would like to talk about\u2014well, a couple of things. But first of all, as Mr Robertson alluded to, clause 54(2) comes into force on 1 April 2017. This actually relates\u2014and, again, it was talked about at great length in the Finance and Expenditure Committee\u2014to when, in fact, the GST regime on online services comes into play. The reason this was\u2014not debated; that is the wrong term\u2014discussed at great length is that the issue was around how long it takes a foreign jurisdiction to gear up for the New Zealand tax system. We had some submissions that suggested it would take 9 months. Others suggested it would take 6 months. It is hard to believe that in this day and age of high-level computer programs\u2014which, of course, all these suppliers are on\u2014it would take any more than just a simple fix of a database. But apparently it does take a little longer than anyone would imagine. In Australia, I think they have allowed 9 months\u2014am I right, Mr Robertson? You might remember.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef43c298f5ab431e8facc6cc5ecc421f\u0022\u003EGrant Robertson\u003C/span\u003E: Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ecc2afb94ba3480b9730d5ff620053e6\u0022\u003ESTUART NASH\u003C/span\u003E: They have allowed 9 months. This is why we have said that this does not come into force until 1 April 2017. It is not some way to avoid paying tax before then. I doubt we are going to see a massive download of iTunes songs on 31 March, but you never know. But that is the reason why that clause is coming into play in a year\u2019s time, or just under a year\u2019s time\u2014we do have to allow these online suppliers enough time, and the Inland Revenue Department (IRD) believes there are going to be about a hundred of them. As mentioned, it believes it is going to raise about $40 million\u2014or, no, not \u201Craise\u201D. We are missing out on about $40 million. The IRD is unsure of the impact that this sort of tax will have and whether it will change behaviours. I suspect it will not, but let us see. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing, as Mr Robertson alluded to, is that the title is a little misleading. Let me explain why. The title includes the words \u201CTaxation Residential Land Withholding Tax,\u201D. This is a capital gains tax; let us make no bones about that. The Government said it would not put in a capital gains tax, but there is a capital gains tax, and this is what it is. This taxes the capital gain on properties bought by overseas investors who buy and sell a property within a 2-year period. It is interesting that the IRD actually recommended a 5-year period because it thought that a 2-year period would be too easy to avoid and that it would allow a lot of gaming behaviour and aggressive tax planning to take place, which we have seen in recent days and which is going on, I think, in a way that not many of us ever realised or contemplated or could imagine. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis bill should probably be called the \u201CTaxation (Capital Gains Tax, GST on Online Services, and Student Loans) Bill\u201D. As Mr Robertson alluded to, this is a missed opportunity in terms of online services. There are a number of reasons why the Government and the IRD say we should not be collecting tax on tangibles. Personally, I do not think that many of them stack up. The reason I say that is what this does is it provides an immediate competitive advantage to online overseas suppliers as opposed to New Zealand ones. As well, the argument is that we live a long way away and that with shipping costs of more than 15 percent, it is more than easily made up. But that is simply not true in this day and age. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI think that the Government has really missed a trick here. It could have gone all the way. It would have pleased the Retailers Association\u2014of that there is absolutely no doubt. When we read in the paper that the IRD is concerned that, in fact, putting GST on online services might change the behaviour of New Zealanders\u2014i.e., they may, in fact, now buy products from New Zealand suppliers as opposed to overseas ones, or they may be put off buying products or intangibles from overseas because of price increases\u2014well, imagine what that would do to our retail sector. Imagine if the impact on our retail sector was that people would now go down to their local store and buy New Zealand - made products as opposed to going online. So this is a missed opportunity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis bill is a capital gains tax and it is a missed opportunity in respect of GST and student loans. The student loan stuff is reasonably pragmatic. I would like to see the sort of arrangement that we have got with Australia expanded. The reason I say that is, as mentioned earlier, when a student enters into a contract with the Government to undertake that student loan, there are a whole lot of terms and conditions that I think are pretty clear\u2014you start earning money and you start paying your loan back. If you live overseas, again, the IRD is very clear on that, and I would like to see these sorts of agreements instigated with other countries around the world. Thank you very much.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EClause 1 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EClause 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBill reported without amendment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EReport adopted.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000571\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00225bc9192b1cdc42a58cb6f936b4712b62\u0022\u003ETaxation (Transformation: First Phase Simplification and Other Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000572\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022732de8e6f9514cee85481c80d135b472\u0022\u003ESecond Reading\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000573\u0022\u003EDebate resumed from 31 March.\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u0022afcd406dc5a6494d9658a19009cd3501\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022afcd406dc5a6494d9658a19009cd3501\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E It is a pleasure to take a call on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill, and let us start out at the beginning. There is a problem with this bill in that the word \u201CTransformation\u201D is having the loosest ever possible meaning given to it in the history of the English language, because there is very little about this bill that could be described as transformative. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIf one were introducing a transformative taxation bill, it would rebalance taxation between hard-working PAYE earners and those who speculate in the property market. Or you would be transforming our taxation to create New Zealand as the taxation regime that the rest of the world looks at and says: \u201CThat is the highest standard of ethics right there and then\u2014no loopholes for foreign trusts.\u201D That would be transformative for the taxation system. Or it would be a taxation bill that finally said that we will ensure that multinational companies pay their fair share of tax in New Zealand and that hard-working wage and salary earners can rest assured that they are doing their bit and so are the other taxpayers. That would a transformative taxation bill. But that is not what is in front of us here today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis bill is utterly misnamed and, once again, the Government has complacently brought forward a piece of tax legislation without actually taking the time to think about what it could do right now, today, to help New Zealand grow a productive economy, to ensure that people paid their fair share, and to ensure that people are given a fair go. That is what tax legislation should be about when it comes to this House, but, unfortunately, that is not what is in front of us. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWhat is in front of us is a series of minor amendments to a range of bills: the Income Tax Act, the Tax Administration Act, the Goods and Services Tax Act, the KiwiSaver Act, the Child Support Act, the Student Loan Scheme Act\u2014which we amended just a moment ago\u2014the Gaming Duties Act, and the Accident Compensation Act. Some of the changes here are linked to the new and improved forms of communication of the Inland Revenue Department (IRD). That occupied a lot of the time of the Finance and Expenditure Committee\u2014discussing the way in which technology could now be used for the IRD to communicate with taxpayers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAs a general rule, those of us on the Labour Party side of the House want to see that technology used, and used efficiently and effectively. Although there will always be a need for rules around that, it did become a little frustrating for me in the select committee as we got into the real nitty-gritty of electronic signatures\u2014were they safe and could we actually make use of email as a formal means of communication? Of course we can. As I said, although we have to step our way through that appropriately, it is important. And fair dos to the IRD. That was what it brought the bill to the committee to do\u2014to move away from paper-based services and towards more digital services. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAs I said, there were references in legislation to things being sent by post and, at the risk of upsetting my former colleague Sir Michael Cullen, not that many people are doing that any longer. So\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221bf121f1df1f4be2ac807749533346b4\u0022\u003EHon Ruth Dyson\u003C/span\u003E: I think he knows that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226eb6e1aeacf94878a253d25c1d7dd545\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: He has worked it out? Yes. So, therefore, the phrase \u201Cby post\u201D has been replaced with phrases like \u201Cby writing\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis will appeal to some of my colleagues\u2014particularly, actually, I am thinking here of my former colleague Maryan Street. We debated a three-tiered approach to the way in which the IRD seeks communications out from taxpayers. There were three tiers of verbs, and we did have quite some debate in the select committee about the hierarchy of verbs. I can see that Mr Deputy Speaker knows that he missed out here\u2014he missed out on this conversation. We do have a three-tiered approach with the use of verbs: to ask, request or inform; to apply or notify; and to formally notify. So, when the IRD is asking for things, we now have a tiered approach to the way in which it asks, requests, or informs; applies or notifies; and then formally notifies. So these changes are big news in the world of taxation. We now have some clear and perhaps more modern language involved in that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAs I said earlier, electronic signatures were a particular topic of debate. We have now provided for documents such as tax returns to be filed under an electronic signature, so it is easy for\u2014I do not know\u2014busy people, like the Prime Minister. When the Prime Minister is doing a tax return, the Prime Minister could apply an electronic signature to that. I think that on this side of the House we would be more than happy to take his tax returns with an electronic signature, you know, because we are not fussy about the form in which the Prime Minister\u2019s tax returns find their way into the public arena. If he wants to be transparent and if he wants to be open to this, then we would be more than happy to see an electronic signature - based return, and that is now possible under this piece of legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI do want to spend a couple of minutes talking about an issue that I did not think would take the select committee very much time, but, amazingly enough, it did\u2014that is, the question of secrecy in a co-location environment. The IRD is now co-located in a number of centres in New Zealand with other Government agencies, and when they are together there are all kinds of efficiencies for the consumers and for citizens to be able to visit and work with Government agencies. We had a long discussion about whether there were adequate secrecy provisions in place for both IRD employees and employees of other Government agencies that were working in a co-located environment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIn the end I was sounding a little bit cynical when I introduced this part of my speech, but, actually, this is a serious matter. The IRD deals with the sensitive information of all New Zealand taxpayers, and in a co-located environment it is possible that someone takes something to the photocopier, they put it on the photocopier, they get interrupted, something happens, and they leave a page behind. Under the secrecy requirements that are currently placed on IRD staff, if another IRD staff member was to walk up and pick up the piece of paper, they would be covered by the same rules. If you then look into having a co-located environment, you might have, as an example, a staff member from the Ministry of Social Development or ACC, or something like that, who is co-located but is not governed by the same secrecy provisions as the IRD staff member. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe had a long discussion in the committee about how we would deal with this. In the end, we upped the requirement on IRD staff to be aware of their own secrecy provisions. They have to have a higher duty of care, essentially, when they are working in that co-located environment, and there are some amendments that have been made by the committee to enable that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThere were some good discussions\u2014and this is a good element of the bill\u2014around how we can help support employees who have the possibility of share purchasing within the firms that they work for. The benefits to employees under share purchasing agreements have not always been clear to people and have not always been easily identified, and as part of an IRD discussion process on this, the amendments in the bill allow the treatment of the amount of benefit from a share purchase agreement as extra pay and allow employers to choose to withhold tax on the value, and would require the employer\u2014whether choosing to withhold or not\u2014to disclose the value received via a monthly schedule. So it is just making more transparent and more open the way in which employee share schemes operate. They are now a much more common part of people\u2019s remuneration, and it is important for the IRD\u2019s processes and policies to keep up with that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EMore broadly, there was a range of changes around information sharing, which continues to be a very important part of what the IRD does. Also around KiwiSaver, there are a series of changes there to ensure that the rules are clear for everyone. One that, again, attracted a lot of attention was around minors\u2014that is, minors with an \u201Co\u201D, Mr Deputy Speaker, not miners with an \u201Ce\u201D\u2014who join KiwiSaver when they are signed up by their parents and perhaps they have been incorrectly enrolled in a scheme. They have until their 19th birthday to opt out. Members who choose to opt out would receive their employee contributions, but not their member tax credits, kick-start contribution, or their employer\u2019s compulsory contributions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe did ask officials whether this was a major problem in that there were armies of young people being signed up to KiwiSaver unwillingly and then being desperate to get themselves out. There are not, but, obviously, where the situation exists that people, when they turn 18, want to remove themselves from KiwiSaver\u2014we hope that they do not, but should they choose to\u2014that provision is being put in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIt is a bill that completely fails on its own title\u2014it is not transformative, at all. It could have just been called the \u201CTaxation and Other Measures Bill\u201D and you would be accurate. But I think what the events of the last couple of weeks have highlighted on this side of the House is that legislation like this is missing the point when it comes to taxation. We need a tax system in New Zealand that the average working person can be confident in, and when they make their contributions and do their fair share, they know that others are doing the same. We do not have that in New Zealand at the moment. We have a system where large, multinational companies are not paying their fair\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022 data-id=\u00226acc0dc119d4460397a8f7df97cb8bb9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226acc0dc119d4460397a8f7df97cb8bb9\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Sorry to interrupt the member, but his time expired some time ago. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022 data-id=\u00228739957f14c245efa3d25f6b29c4f441\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228739957f14c245efa3d25f6b29c4f441\u0022\u003EALASTAIR SCOTT (National\u2014Wairarapa):\u003C/span\u003E Mr Deputy Speaker, I was hoping you would give Mr Robertson a little extra time, because I was just waiting for him to explain his proposed transformative policy\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022820b911ca53c4e0a860a83a959c7c01d\u0022\u003EGrant Robertson\u003C/span\u003E: Oh!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af1d3b5c4ac04723adbc8da294cb27c0\u0022\u003EALASTAIR SCOTT\u003C/span\u003E: With what? Well, with this $11,000 that we are giving every person over the age of 18\u2014how he was going to fund the $11,000 that, apparently, everyone is going to receive. Because\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002250c6c4448e244a62a0508a5f61e5531f\u0022\u003EHon Ruth Dyson\u003C/span\u003E: That\u2019s nonsense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229277cf6ff44d4a75a1ee81d9ce384d26\u0022\u003EALASTAIR SCOTT\u003C/span\u003E: It is not nonsense; it is absolutely a brain explosion from the Labour Party leader that would be transformative. It would totally be transformative because it would have to be funded in some way. I understand that the proposed method of funding the transformative idea is just to wipe out benefits\u2014wipe out benefits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EThe universal benefit that has been proposed would be very transformative, but I would also like to hear from the Labour Opposition how on earth that would be funded\u2014this transformative idea from the Labour Party. How would that $11,000 handout\u2014which is all it is\u2014be funded? You talk about a simplification, and that brings into the discussion the other word, \u201Csimplification\u201D. If it is so simple, then let us hear where tax rates and GST rates would be if everyone was given a handout of $11,000 per annum. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EMr Robertson also commented on creating and legislating fair, honest\u2014making sure people pay their fair share of tax. That is exactly what we discussed in the last bill just a few minutes ago, where the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill was discussed in Committee. That is exactly what we are passing in this House: taxation legislation that is fair and ensures that people pay their fair share. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225e6b7aaa-8157-4d5e-9940-1bdbcd61ae95\u0022\u003EMr Robertson, I would invite you to take a call and explain how the transformative idea of the Labour Party, which is to give out $11,000, which will solve everyone\u2019s problems somehow\u2014forgetting the people who are most in need. It comes back, again, to the tax system that we have, which supports those who are most in need; not just giving them all the same. You do not give an 18-year-old single male the same benefit as a single mum with four kids. That is just an absurd idea and one that should be totally discounted by the sensible people who are in the Labour Party when they hear such a ridiculous suggestion from their leader. I suggest that those members continue to talk about simplification and transformation. I look forward to hearing more from the Opposition. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022a8fcd4e991bd443a8987cfcddd82fd13\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a8fcd4e991bd443a8987cfcddd82fd13\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E The last member who spoke on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill, Alastair Scott, asked some very interesting questions, and I have some answers for him. His first question was how we are going to fund what we want to do\u2014keeping in mind that the universal benefit is something that we have discounted. But let me give the member one idea. This is transformative. It may be quite hard for the member to get his head around, but how about this one: everyone pays their fair share of tax. How about that? Pay your fair share\u2014imagine that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe have the New Zealand Herald journalist\u2014I am not dismissing the journalist. Matt Nippert is a very good journalist, but he is a journalist. He is not a member of the Inland Revenue Department (IRD) and not a tax expert, but a journalist who has uncovered tax rorts to the tune of about $500 million. This is just the top 20 companies\u2014uncovered by a journalist. But wait, there is more. Down the other end of the scale, the real experts say that we could be missing out on $7.1 billion a year for our tax base due to these large multinationals avoiding and evading tax. That is a transformative idea: everyone pays their fair share. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000602\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe good thing about the New Zealand tax system is that we do not want people to pay more than their fair share. We are not asking them to hand over all of their profits; all we are asking them to do is pay their fair share, and if it is company tax, it is only 28 percent. It is not a whole lot of money. They are still left with a whole lot of money in their back pocket that they can repatriate back to the States. But the interesting thing is that National\u2019s Minister of Revenue has come out and said there is no problem here\u2014we have not got a problem in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000603\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe amazing thing about this is that the Obama Administration tax officials, who know a little bit about tax\u2014\u201CTrust me, I am from the IRS.\u201D\u2014say there is a big problem. In fact, President Obama himself called these companies traitors. David Cameron has come out and said: \u201CWe are going to change the law because this is wrong.\u201D Even the New Zealand Prime Minister has come out and said: \u201CThis is morally wrong.\u201D But the revenue Minister has said: \u201CThere\u2019s no problem. Don\u2019t worry about it. Nothing to see here.\u201D Well, I do not know what planet the revenue Minister is on, when we are $7.1 billion down on what we should be because companies are engaged in aggressive tax planning that sees them transfer all their profits offshore and not pay any tax in New Zealand. Mr Scott, I think everyone paying their fair share is pretty transformative. I think it is a pretty good idea too. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe thing that gets to me is when National Ministers and National members stand up and defend these large multinationals, at the expense of hard-working middle New Zealanders who actually pay their tax. You know something is wrong. You know they are a little bit out of touch. I would guess, but I am not going to put my house on it, that if I went into Mr Scott\u2019s electorate and I walked down the main street of Masterton and I asked these middle New Zealand families \u201CDid you pay your tax?\u201D, they would say: \u201CAbsolutely.\u201D In fact, they would be affronted at any suggestion that they did not pay their tax. If I said to them \u201CDo you think it\u2019s right that these large multinationals are paying no tax?\u201D, I guarantee 95 percent of people whom I interviewed on the main street of Masterton would say that it is about fairness. What I argue is that what the multinationals are doing at this point in time to the New Zealand tax base simply is not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EYes, Mr Woodhouse, we do have a problem. It is recognised by every single OECD country that we have a problem. Where the difficulty lies is in the solution. But what we think we must do is at least quantify the problem. At least get a panel of experts in. Not just one\u2014Mr Shewan\u2014but let us get a panel of experts in, to understand the extent of the problem. Then we will know how much we should be investing in this. I can vouch that the IRD has a number of incredibly capable people in its ranks. It has some of the finest tax experts, I believe, in the world. In fact, I know that the IRD is co-opting some of its staff to help the OECD.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will tell you what I know about the IRD officials who appear in front of our Finance and Expenditure Committee. They are passionate about what they do, but they are also passionate about New Zealand. They also understand that the integrity of the tax system is fundamental to a sound economy. I believe that if the Minister said to his officials, in a public way, \u201CWe have a problem here.\u201D, they would say: \u201CYes, Minister. We know that. We\u2019ve been telling you this for a while.\u201D If he said to them \u201CCan you go away and quantify the value or the extent of the problem we have here?\u201D, they would take to it to like\u2014I was going to say \u201Ca robber\u2019s dog\u201D, but that is probably not the right description for the IRD. But what I am saying is that everyone recognises this is a problem, except the revenue Minister. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThen, within about 2 weeks, we have this overseas trust issue. I believe that a country\u2019s brand\u2014in fact, any brand\u2014is based around how people perceive that brand. Mr Key and Mr Woodhouse may say \u201CIt\u2019s not a tax haven. We\u2019re not operating any sort of tax schemes.\u201D, but the international press come out and say that if it smells like a rat, if it looks like a rat, and if it tastes like a rat, then it probably is a rat. I think that the way the Prime Minister should have handled this\u2014if he did not know already, and there is a suggestion that he had been warned, because articles were published in the National Business Review detailing exactly how this worked\u2014is that the Prime Minister should have come out and said: \u201CWow, we did not understand the extent of this problem. I am going to work day and night to close this down because for me the integrity of our country, the integrity of our brand, and the integrity of our tax system is paramount.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut, instead, what the Prime Minister did was try to defend multinational organisations and those who are attempting to avoid tax. The thing about that is the vast majority of New Zealanders\u2014middle New Zealand\u2014pay their tax. In fact, if any part of middle New Zealand works to avoid their tax, the IRD comes down on those people like a ton of bricks, yet when a multinational organisation avoids\u2014I am not saying evades; I am saying avoids paying its tax, or when overseas dictators or arms\u2019 dealers or oligarchs, or whoever, because we do not know, seek to avoid paying tax, the Prime Minister defends them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMy personal view is that the Prime Minister has lost touch with what middle New Zealand cares about. Middle New Zealand cares about fairness. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe interesting thing\u2014I have got four children\u2014is that almost the first concept that children learn is fairness. Those of you with children will know where I am coming from. When my little son is aggrieved by his sister, he comes up and says: \u201CDad, this isn\u2019t fair. It\u2019s just not fair.\u201D Fairness is the first concept that children learn. I think it is what makes New Zealand such an egalitarian society, or it used to be. It is because we value fairness. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe expect everyone to do their fair share and pay their fair share. When the Prime Minister and his Ministers stand up and put the interests of multinational companies and overseas oligarchs before the interests of middle New Zealand, then I think we have a problem. I think we have a Government that has turned arrogant, and I think we have a Prime Minister who has lost touch with what New Zealanders really value, and that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222369283b6b0a43ac9fb106aed75e3430\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Anyway, back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e0c12800753e4b03a97057a0f7ecb678\u0022\u003ESTUART NASH\u003C/span\u003E: \u2014is fairness. Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022 data-id=\u0022af3b07991cd4432cbb2d301cb9f0ed4b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022af3b07991cd4432cbb2d301cb9f0ed4b\u0022\u003EBRETT HUDSON (National):\u003C/span\u003E For the edification of the member Mr Nash, who has just resumed his seat, I might get on to a bit of the English language and some comprehension, which might help him. But before I do that, I would just like to note that that member levied a pretty serious accusation against some foreign companies. I believe he used the term \u201Ctax evasion\u201D. I would encourage him to leave this House\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a9ed353616a046948ec630ccf23cfced\u0022\u003EStuart Nash\u003C/span\u003E: I said \u201Cavoidance\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d000013ccc9d4a579f984cad35f55e11\u0022\u003EBRETT HUDSON\u003C/span\u003E: He said \u201Cevasion\u201D. Check the Hansard. The member said \u201Cevasion\u201D. I would encourage him to leave this House and to levy that accusation out in public. He might just find that his personal tax structure gets put to the use that he actually claimed in the media he set it up for. It is a very, very dangerous statement to make, and one that should be made only with some real evidence. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003EWe will move, instead, on to one of the hardest tasks that you could possibly have with Opposition members in this Parliament, which is helping them to understand English. The bill is called the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. When you have a title that says \u201CFirst Phase\u201D, it would automatically suggest that there are further phases to come. Therefore, you probably would not read the bill and say: \u201CThis is the entirety of the inland revenue transformation programme.\u201D In fact, the natural response would be that this is not the entirety of the inland revenue and tax transformation programme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003EThe title also says \u201CSimplification\u201D. Therefore, looking at the measures of the bill, one would expect one of many phases or one of several phases to be about simplification, which in itself is a positive thing but not necessarily wholly transformative. That is precisely what the bill is seeking to do, such as helping people to get their tax refunds a little sooner and adjusting thresholds so that things can happen automatically, and it will help to reduce time and costs for both small businesses and salary and wage earners. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003EThis bill is a step\u2014a step on the transformation journey. We know, as the Inland Revenue Department has told us and as the Minister has told us, that the transformation project with the department is a business-driven tax transformation. It will take some years and some effort. I look forward to this bill passing through the House, and I look forward to the subsequent phases of the taxation transformation. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022 data-id=\u00225bab8dead40a4dc7a4659e02f9d5d73c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225bab8dead40a4dc7a4659e02f9d5d73c\u0022\u003EJULIE ANNE GENTER (Green):\u003C/span\u003E I rise to take a call on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. The Green Party, of course, supports this bill. It is largely non-controversial. It is certainly nothing earth-shattering. It makes a number of small administrative changes to the tax system that will, hopefully, result in it being a bit simpler and will enable Government departments to work more effectively through sharing information. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EI have to say that I really agree with what my colleague Grant Robertson said earlier tonight, though. The name of the bill suggests that it could be doing quite a bit more. Obviously, transformation and simplification would be quite welcome, I think, by many members of this House when it comes to the tax system. I can speak on behalf of the Green Party and say that a simpler, fairer tax system is one way that we can address the two major challenges that are facing us: growing inequality in this country and climate change. Changing the tax system, making it simpler and fairer, is one way that we can reduce the growth in the gap between the very rich and everyone else, but especially those who are doing it incredibly tough right now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EIt is another way that we can send signals to business and consumers and transition to a cleaner, smarter economy\u2014one that is not going to leave us susceptible to the challenges of climate change. We can reduce fossil fuel use, we can reduce pollution\u2014all of that can be done through the tax system and, of course, that is a challenge that, unfortunately, our National Government has completely failed to take up in its nearly 8 years in Government. All it has done with the tax system is tinker around the edges. I have to say that the work on this bill was done by officials\u2014it is good work; nothing to criticise other than that there are some omissions\u2014but, ultimately, the officials\u2019 priorities are determined by the Government of the day. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EIt is interesting because last week we heard from the Prime Minister that the Inland Revenue Department (IRD) had not been able to progress changes to the rules around New Zealand foreign trusts to avoid the use of New Zealand as a tax shelter by individuals who live overseas because the IRD had other priorities. But I think that is really shifting blame, because it is the Government of the day that directs the officials in what their programme of work should be. It determines their priorities and gives them the resource to be able to undertake that work. So I would say that certainly something that is missing from this bill\u2014which would be very appropriate, given all of the news around the Panama Papers in the last week and a half\u2014would be amendments that would simplify the work that the IRD would have to do, and does have to undertake, if and when other countries request information from us about New Zealand foreign trusts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EAt the moment the situation is this: we have got these New Zealand foreign trusts, and somebody who does not live in New Zealand and does not earn money in New Zealand can set up a foreign trust, which they can use to hide assets and avoid paying tax, or, even worse, hide criminal activities. Of course, there are legitimate purposes for these trusts as well, but because of the secrecy around them it is inherently attractive to those who would want to hide criminal activity or avoid paying tax in their home country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003ELast week the Prime Minister claimed that there was full disclosure, there was no problem to change it, and the IRD was collecting or requiring the trusts to keep all of this information. What he did not say was that unless the other country is Australia, if any country in the world was to ask us for information about foreign trusts that have been set up in which the settlor is resident in their home country, the IRD would not be able to give them that information because the IRD does not collect the information. It would have to go through the 12,000 New Zealand foreign trusts that are registered here. You can imagine that huge burden of bureaucracy. It would actually be impossible for us to effectively share information with other countries, even those that have a double tax agreement with us. Of course, there are about 40 countries that have a double tax agreement with New Zealand and another 12 that have some information-sharing arrangements with us, but, fundamentally, because of the nature of the New Zealand foreign trusts and the information collected by IRD at the point at which they are set up, the only information that needs to be given to the IRD is the name of the trust\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fdb06c99dee944d8a630b5bcad883559\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000627\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002254d5698e08c548f39b25c8e5137e25a2\u0022\u003EJULIE ANNE GENTER\u003C/span\u003E: \u2014which may have no bearing whatsoever on who the settlor is or what the activity is, or even the date that it has been settled.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000628\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ebdd64817c548349cc626e62dd6b6c9\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000629\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd84a98fe47645128dbfbc82bc119b7e\u0022\u003EJULIE ANNE GENTER\u003C/span\u003E: So one way that this bill could be improved\u2014because it is about transformation, first phase simplification, and other measures\u2014would be to have provisions in it that set up more complete disclosure and a registry so that when the IRD collects that information, it would then be much easier for it to share information with other countries and prevent tax avoidance and other criminal activities. I am sure that is something that New Zealand would want to be doing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000630\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003EThe Prime Minister himself said that we are working with the OECD and that we are trying to crack down on people who are avoiding paying tax here in New Zealand\u2014although, unfortunately, of course we have heard just in the last few weeks as well that the Government has no idea whatsoever about how much tax it is missing out on from multinational companies that avoid paying tax in New Zealand. We have had estimates anywhere from half a billion dollars a year to a billion dollars a year\u2014potentially more. This is a lot of revenue that this National Government has simply failed to prioritise, while just earlier today we were going through the Committee stage of a bill that is setting up a regime amending the student loan scheme so that we can get more information about people who have outstanding student loans who are living overseas and chase down the money that they owe the Government\u2014those students\u2014rather than chase down the revenue that is owed by big multinational corporates that earn huge profits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000631\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003ESo I think that what is missing in this legislation, and what has been talked about in the House earlier in another bill that we heard at the same time, really demonstrates the priorities of this National Government. Ultimately, it is protecting the status quo. It is tinkering around the edges but, fundamentally, is committed to an economy that is unfair and unsustainable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000632\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f3f603d48d564db2b6ee54168195543c\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Order! I will just remind the member\u2014she will be seated while I am speaking\u2014that this is not a general debate speech. It is specifically about this bill in relation to taxation. The fact that she spent some time talking about what it is not does not actually address the bill. So I invite her to come back to the bill, please.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000633\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d17aafb62130486b9e0b8a70585809a4\u0022\u003EJULIE ANNE GENTER\u003C/span\u003E: I raise a point of order, Mr Speaker. I think that of all the speeches that we have heard tonight on this bill, mine is straying no more from the bill than any other speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000634\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241b0fccb1b724cb39006bdbab96e0df5\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Well, that is not the point. The point is that I have asked you to come back to the bill. The fact that you are saying that you are sinning to a lesser degree than other speakers does not bring your speech into order. The fact that I may have gone to sleep while somebody else was giving their contribution does not necessarily allow you to have a similar amount of lack of attention from me. So please come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000635\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002258f935f1-6646-40ab-9d99-17029396850c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223c0e955c6e7d4d189e2cb4628e677c48\u0022\u003EJULIE ANNE GENTER\u003C/span\u003E: As I said, the Green Party will be supporting this bill. It does not make any radical changes to our unfair tax system, which the National Government is continuing to support. With all the different issues that have been in the news in the last few weeks I do think that the National Government should be rethinking its priorities and looking out for average New Zealanders and looking to making changes to the tax system that are actually going to deliver a fairer, greener society here in New Zealand.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022 data-id=\u0022a972c2e217d048a6a26702d60d9c48fa\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000636\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a972c2e217d048a6a26702d60d9c48fa\u0022\u003ERIA BOND (NZ First):\u003C/span\u003E It is a pleasure to stand and speak to the Taxation (Transformation: First Phase Simplification and Other Measures) Bill on behalf of my colleague Fletcher Tabuteau tonight.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000637\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EI wish to begin by commending the Finance and Expenditure Committee for a detailed and comprehensive analysis and commentary on another Government taxation bill, which amends a total of eight Acts. It is extremely important that an omnibus bill passing through this House contains no errors, oversights, or unintended consequences. This bill aims to transform, simplify, and improve the administration of our taxation system and how the Inland Revenue Department (IRD) engages and interacts with taxpayers. The main policy measures in this bill provide for easier communication with and by the IRD, simplified tax rules, and the sharing of information.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000638\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EDuring the second reading I would like to address a number of those policy measures on behalf of New Zealand First. During the first reading New Zealand First expressed concerns about how the co-location of IRD staff with other Government departments might impact on the security of personal information and data. The select committee\u2019s report identifies a number of options that were considered by the committee to ensure the secrecy and safety of taxpayer information. It noted that clause 117 in the bill, as drafted, might have incentivised reckless or negligent behaviour. We would support the select committee\u2019s recommendation that this clause be amended to specify that, among other conditions, an IRD employee does not breach secrecy conditions if they do not intend the breach and took reasonable care in respect of the place and conditions to prevent it. But this should not preclude court action for flagrant or deliberate breaches either.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000639\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EA core part of this bill deals with a range of provisions to facilitate and formally recognise digital and electronic communication between the IRD and taxpayers as the department moves away from paper towards digital services. This bill also sets out a three-tiered approach to communication and changes to the language used that are proposed in this bill. Information sharing using accepted business software as a means of communication must not breach the secrecy provisions in section 81 of the Tax Administration Act. New Zealand First notes the recommendations from the Finance and Expenditure Committee that this bill be amended so that a new subsection is inserted into the Tax Administration Act to ensure that transmitting information in this way does not constitute a breach of privacy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000640\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EThis bill also deals with the use of taxpayer voice biometric information. The bill as written specifies that the data could be released only with the taxpayer\u2019s consent and only for the purpose of verifying the client\u2019s identity. New Zealand First supports the select committee\u2019s recommendation that an additional safeguard be included whereby the Minister of Revenue should be notified when biometric information is shared.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000641\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EWhen discussing communication within the context of this bill the select committee reviewed the use of common verbs within legislation. Given the intent of this bill, it is simply about how Kiwis interact with the tax department. New Zealand First shares the select committee\u2019s concerns that the use of common verbs to signal specific methods of communication has the potential to confuse taxpayers, defeating the whole purpose of simplification. We would support the select committee\u2019s recommendations that common verbs be added to the defined terms list in every section of the Income Tax Act that contains them. Taxpayers must have absolute confidence as to what words like \u201Cnotify\u201D actually look like in reality. Vocabulary is again an issue, with the potential to create an unintended consequence in section 91EE of the Tax Administration Act, amended by clause 140. Replacing the word \u201Crequested\u201D with \u201Crequired\u201D suggests that an offence could be committed if that instruction is not followed. This was not the intention of the bill as it was introduced. We would support the Finance and Expenditure Committee\u2019s recommendation to amend the affected clauses.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000642\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EWhen addressing special tax codes the bill as introduced made several amendments. The select committee has identified legislative error regarding \u201Cno notification\u201D tax codes. That needs to be corrected. It also identified a legislative oversight concerning special tax code certificates. New Zealand First strongly endorses making these corrections and amendments.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000643\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EA drafting weakness was also identified by the select committee when reviewing the legislation as it applied to automatic enrolment criteria under provisions relating to KiwiSaver. The wording of the bill as introduced appears to treat an automatic enrolment as a mistake only if there is a failure to meet all criteria. Clause 207 needs to be more specific, because the bill\u2019s original intention was that the automatic enrolment \u201Cwould be treated as a \u2018mistaken\u2019 enrolment if one or more of these criteria was not met.\u201D Other provisions in the bill relating to KiwiSaver refer to the opt-out criteria for minors who have been incorrectly enrolled before their 19th birthdays. New Zealand First agrees with the select committee that minors should be protected from being automatically enrolled. We also agree with the select committee recommendation to amend clause 210 to specify that the bill\u2019s opt-out provisions would not apply when a person has contracted directly with a provider and they are still a minor. This change to the relevant section of the KiwiSaver Act 2006 is common sense.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000644\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003ENew Zealand First supports legislation that is robust, well supported by empirical evidence, fit for purpose, and achieves its intended aim. New Zealand First is happy to support this legislation with the changes as recommended by the select committee. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022 data-id=\u0022a45f9ab0572c4c7da1ec3b94b8860935\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000645\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a45f9ab0572c4c7da1ec3b94b8860935\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: The question is that the motion be agreed to. Those of that opinion will say Aye\u2014[Interruption] I am sorry. I have put the question. [Interruption] I am sorry, I have put the question.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000646\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003EBill read a second time.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000647\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00226b6695e9ceea4d78944053dddbdc3b27\u0022\u003ENew Zealand Business Number Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000648\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00229ed4d4c67d5047cc938ec500472b6582\u0022\u003EThird Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022 data-id=\u0022f76dcb41a4174cbcb9013579c632974b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000649\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f76dcb41a4174cbcb9013579c632974b\u0022\u003EHon JUDITH COLLINS (Minister of Corrections)\u003C/span\u003E on behalf of the Minister for Economic Development: I move, That the New Zealand Business Number Bill be now read a third time. It gives me great satisfaction to support this legislation at the third reading. The New Zealand Business Number is an important part of Result 9 of the Government\u2019s Better Public Services programme, which aims to reform the public sector to provide high-quality, flexible, and cost-effective public services in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000650\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EI would once again like to thank the Commerce Committee and the submitters for their work on, and contribution to, the changes made to the bill. They will make the bill more effective and ensure that Parliament\u2019s intention is clear. I would also like to express my appreciation for the support received in the House for this legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000651\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThe purpose of the New Zealand Business Number is to enable easier and more efficient interactions for business in New Zealand. The bill will enable the allocation of the New Zealand business numbers to eligible businesses, corporate and public entities, and to eligible individuals in business, unincorporated entities such as sole traders, partnerships, and trustees of trusts. It will establish the statutory position of Registrar of New Zealand Business Numbers and establish a New Zealand Business Number Register. It establishes rules to enable the access to, and use of, the 23 pieces of primary business data about each entity that will be held in the New Zealand Business Number Register, taking into consideration privacy issues. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000652\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThe combination of a unique number, a data set, and access to that data results in a New Zealand Business Number ecosystem that will provide savings to businesses, savings to Government, and e-commerce opportunities. Early adopters in the private sector are already finding uses for the New Zealand Business Number in areas such as export documentation invoicing. Some public sector agencies are also adopting the New Zealand Business Number under the current regulatory framework. The full benefits of the New Zealand Business Number will be realised with wide uptake by the public sector. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000653\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThe more businesses who choose to use the New Zealand Business Number, the more value it will have for other businesses already using it. Similarly, a whole-of-Government approach to using this number is also important. I would like to assure the business community members that there is a plan to implement this legislation. The previous requirement in the consultation draft of the bill for eight business-facing Government agencies to recognise the New Zealand Business Number was removed prior to the bill being introduced, and will be replaced with a set of whole-of-Government directions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000654\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWhole-of-Government directions provide more flexibility to be able to adapt to a rapidly changing environment, and will also provide agencies with more detailed implementation instructions. The proposed directions are more ambitious in both scope and breadth than what was originally proposed in the draft legislation. Consultation with 185 agencies\u2014that is 32 Government departments and 153 Crown entities\u2014took place from July to October 2015, and analysis was undertaken to ensure a fit for purpose implementation plan. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000655\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThe House will have the opportunity to scrutinise the Government\u2019s plan for the implementation of the New Zealand Business Number across the public sector in the coming months. I commend this bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022 data-id=\u00227e048a0b76e549548969f1042589b3bb\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000656\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227e048a0b76e549548969f1042589b3bb\u0022\u003EDr DAVID CLARK (Labour\u2014Dunedin North):\u003C/span\u003E We will be supporting this bill, but we do it with significant reservation. In the Committee stage I moved an amendment to an amendment put forward by Ria Bond from New Zealand First, which was an excellent amendment to ensure that this bill actually delivered on what it promised. It was a sensible amendment, and I believe that my amendment to the amendment made it even more sensible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000657\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EPut in plain language, it was a small change to the legislation that would have ensured that the Government does implement this bill as the language in the bill suggests: that the Government makes sure that there is a single number for businesses to deal with Government, so that when businesses come to deal with Government, whether it be with the Immigration Service or with ACC or with the Inland Revenue Department (IRD) or with whoever they want to have to deal with\u2014or might not want to have to deal with, but do\u2014they would have a single number that they could put forward and say: \u201CLook, in my dealings with Government you will find all of my information under this number. Here is the number. Now can we talk?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000658\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThat is what this bill purports to want to do. Unfortunately, from the very start there have been doubts about whether the Government can deliver on this. In the Committee stage that amendment was put forward to test the Government\u2019s mettle\u2014to say: is the Government really committed to achieving this outcome of having a single number for business to deal with the Government? The amendment said that the Government will put this into play in 2 years\u2019 time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000659\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThe opportunity, of course, was there for the Government to say: \u201CLook, Mr Clark. You\u2019re being a little unrealistic. Let\u2019s make it 3 years\u2019 time. Or let\u2019s make it 4 years\u2019 time.\u201D But no, the Government rejected it outright. It did not want a time frame around ensuring that this policy was in place. And so what we learnt from that is that a lot of this is window dressing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000660\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThe intention is good\u2014the intention is good\u2014that there should be a single number for business to have, to deal with the Government. There is a lot of red tape for business and it does not take a member very long in this Parliament, or very many visits to business, to discover that there is a lot of frustration in dealing with the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000661\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThe Government talks a big game, but frequently it is inflexible and it introduces red tape. Under this Government we have seen changes around child support legislation that have put additional burdens on employers. We have seen it trying to introduce tax for car-parks and other measures. We know that putting burdens on business is easy; taking it off is hard in the modern world. We agree with the intention, but we share the doubts of the likes of Federated Farmers. Federated Farmers said they were concerned that the list of agencies involved initially did not include WorkSafe, with which, of course, they deal. The list does not include Immigration New Zealand, with which, of course, they deal. They were concerned, equally, that local government may be considered to be brought in under the business number too. But no moves have been made in that regard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000662\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003ESo we are disappointed, on this side of the House, that the Government has not fully committed to this ideal. We understand that behind the scenes, yes, there are some tensions with the IRD, because the IRD is concerned about data security and the failures of the Government, in terms of privacy and information that is important to business and to individuals. We understand that, and yet it is the Government\u2019s problem to solve. It is solely responsible for running Government. Its members are the people who can commit resource and who can commit to talking with the officials to make sure that these problems are ironed out, to make sure that the system is simple, and to make sure that businesses do not have to get tied up in red tape every time they come to Government. But it does not seem willing to do it. And you have to ask why. You have to ask why, ultimately. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000663\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EIt boils down, in my view, to the fact that this Government is more concerned with tilting the playing field towards big business. It does not care about small business. We have seen, year after year, fewer small businesses created under this Government than were created under the last Labour Government. It seems pretty evident from the statistics that the Government is not concerned about the majority of business owners in New Zealand. It talks the talk, but it will not walk it. It will not pass legislation that actually delivers on the promise in this bill. The Government will not even set a time frame. It will not even say: \u201CIn 5 years\u2019 time there will be a single number that you have to deal with. We will commit to getting our software upgraded or whatever it takes to make sure that businesses have a simple, straightforward way into Government.\u201D Instead, it says: \u201CWe like the idea. We will put it on the never-never.\u201D That is what this bill achieves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000664\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EIt will probably take a Labour Government to come in and sort this out, dare I say, because I think it will still be a problem in a few years\u2019 time. What is worse is that this will be an additional cost on the Government in the short term. That is something that business will be prepared to wear, if we get to a single number in a reasonable period of time. But, in the interim, businesses will be forced to take on yet another number. And this is something that was warned about in the regulatory impact statement that was put out by Treasury, which the Ministry of Business, Innovation and Employment worked on, which was put out before the bill even got into the House. The officials knew the problem was there, but perhaps Steven Joyce\u2019s ears were blocked\u2014I do not know. I do not know why he did not hear this advice. I do not know why the Government did not move, behind the scenes, to ensure that the processes would be in place to implement this legislation, to make sure that the Government could deliver on its promise to business to make it easier to deal with the Government. This is a lost opportunity, and we still hope that Government members will find it within themselves to get there, to make sure that there is a single business number within a reasonable frame of time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000665\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EChartered Accountants Australia and New Zealand told us, in its submission, \u201Cthat the benefits for businesses may be overstated \u2026 [without] prompt and broad integration by government agencies\u201D. What \u201Cprompt and broad\u201D means, I do not know. I put forward 2 years; the Government could have said 3 years. But prompt, I think, means getting this done within 5 years, certainly. I would be interested in whether other Government members can outline a time frame in which they expect this business number to come into effect\u2014one that cannot be laughed down in the House. In the meantime, businesses must collect another number\u2014yet another number\u2014to deal with the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000666\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003ESo slow implementation across the Government will carry this cost to business. There is no way to avoid that. What could be avoided is this being put on the never-never. The Government can plan towards that. It can plan towards investing in its own infrastructure, to make sure that it has the capacity to deliver on the promise of this bill eventually. I look forward, I hope, in a future bill that comes to this House, to some kind of an indication as to how that is going to be achieved. It may be through the Budget process\u2014all may be revealed. There may be a secret plan going on behind the scenes. There may be hamsters running in the wheels of power, generating a plan to deliver on this bill. I surely hope so, because right now it comes nowhere near. It is only a promise at this stage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000667\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EAnd the problem, too, is if businesses lose faith in the ability of the Government ever to deliver on this, they will hold off on getting that extra number. Businesses will wait, and critical mass will be hard to achieve within the government system also. Officials will be doing two tasks: dealing with the existing business number and with the new business number. So if businesses hold off because they do not have faith that the Government can deliver on this, we have our greatest problem still. So I am hopeful that the Government is working on this behind the scenes to deliver in the Budget a solution to the problem of the business number that it is creating here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000668\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThis is a Government that is failing on every front with business. Let us face it: it set itself, in its glorious Business Growth Agenda, a target of getting exports to 40 percent of GDP. It has not come close. It had it at 30 percent\u2014it is going down. It is going down, and it is projected to go down further. This is a Government that is failing on every front. It tried to negotiate the Trans-Pacific Partnership\u2014it went off course. It failed to even ask for protections for our housing, so that we could protect our economic sovereignty to make decisions in the national interest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000669\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EThis is a Government that is off beam on economic issues. It is failing businesses, and here, in the short term at least, it is adding more red tape to businesses, with the promise that it will go in the longer term. I challenge this Government opposite to put down a time frame in which this will be achieved, and to stump up with the resources to achieve it. Without that, all we are doing here is putting an additional impost on business. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000670\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225bbd9f26-fdb0-4b85-a836-0fc46e1bba3c\u0022\u003EIt should be easy for business to deal with the Government. There is no excuse for this dilly-dallying, for this window dressing. The intention is good. We will support the bill but, for goodness\u2019 sake, we would like to see, from the Government, resource and a plan to get us to the single number that is promised in this legislation.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022 data-id=\u002202b957acfbcb4d5bbbc83ff4f13d24f2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000671\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002202b957acfbcb4d5bbbc83ff4f13d24f2\u0022\u003EMELISSA LEE (National):\u003C/span\u003E I would like to thank the member who just sat down, David Clark, for supporting this bill. But before I move on to talking about the bill, I would just like to comment on a couple of things. Dr David Clark talked about how he actually supports businesses and how he wants the economy to grow, and I would say one thing to him: support the Trans-Pacific Partnership. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000672\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EIt is great today to see the final passage of this New Zealand Business Number Bill. The New Zealand Business Number simplifies how business can work with Government in an effective and productive way. The New Zealand Business Number is an excellent initiative supporting better business access to Government and the wider agencies. It was a privilege to be part of the consultation process that happened. As chairperson of the Commerce Committee I say we have had submissions and actually heard submissions as well. We worked collaboratively with the members opposite, as well, during the select committee process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000673\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EThe Commerce Committee considered 14 written submissions and heard only five, but the committee did not recommend any fundamental changes to the policy of making the cost of doing business easier. New Zealand businesses are growing\u2014whether they are in fact small or larger businesses, they are increasing in size, as well as in vigour. We are working to lift our long-term growth rate, and we will help to do this by continuing to diversify and build productivity in the economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000674\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EThis House knows that our Government has been working really hard for business, as well as supporting the development of high-quality public services. Our public services must be able to give support to both commercial and sole trading needs. We know that businesses have been asking for an easier way to deal with Government agencies, and this New Zealand Business Number will be providing that. It will be delivering that for businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000675\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EIt is really a pleasure to be able to offer the opportunity to small businesses. Small businesses across New Zealand are the ones with the most to gain from the New Zealand Business Number. Taking up time with bureaucracy is, in fact, a waste of skills as well as resources for hard-working New Zealanders, and this will be reduced through the adoption of the New Zealand Business Number. It will also save businesses about $60 million a year, which will naturally help New Zealand to get rid of some debt and support our local economies, creating more jobs and opportunities for Kiwi families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000676\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EA majority of businesses in New Zealand are mum and dad family owned businesses. I mean, a big chunk of the New Zealand economy is actually run by small business operators, and ease of business is something that this Government wants to promote. Ease of business is something that we are delivering for these businesses, through the New Zealand Business Number. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000677\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EI know that members opposite have sort of suggested that this is just another number; it is not so. It is, in fact, a number that will help to transform our economy. The New Zealand Business Number is a unique identifier provided by the GS1 global standards organisation, which supports wider portability across different agencies and sectors, and will also allow greater access to e-commerce. It is also able to recognise Australian business numbers. So we will be able to do business with much more ease, and, hopefully, better produce greater profits for these businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000678\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EBusinesses are keen and willing to sign up to the New Zealand Business Number, and our Government has acquired 10 million unique identifiers to provide to those businesses. I know that there were concerns raised in regard to Government departments taking and using the New Zealand Business Number, and that is my hope as well. Implementation is something that needs to happen fairly quickly, and I believe that it will. I think the New Zealand Business Number is part of a greater programme of this Government delivering business growth to New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000679\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002218f9e3ea-81c5-4414-af48-d6bb843a9227\u0022\u003EThe Business Growth Agenda is focused on lifting business confidence and on building strong export markets, building investments, and building innovation. The Business Growth Agenda is a plan from our Government to lift economic performance and support better economic management in this country. The New Zealand Business Number is a great thing for New Zealand and New Zealand businesses. I commend this bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022 data-id=\u002280d276270b7a4322a0e9d18a9e4ebb03\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000680\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002280d276270b7a4322a0e9d18a9e4ebb03\u0022\u003ECLARE CURRAN (Labour\u2014Dunedin South):\u003C/span\u003E You know when the Minister Judith Collins gets up and reads a third reading speech in a very quiet, monotone voice that there is a problem with the bill, and there certainly are some real problems with the New Zealand Business Number Bill. This is a bill that, when it came before the Commerce Committee, had general support across the House. And the more that we teased into it, the more that the submitters came and spoke to us about it, the more we realised how unprepared this Government was and how it had not done the work that needed to be done before a bill such as this was introduced, and the more we realised how deeply flawed it was. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000681\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003ELabour is supporting this bill tonight with very strong reservations. We support it in this third reading because of the intent and because, ultimately, we all agreed in the first reading and at the select committee in the process and that this was, actually, a good idea. We had no idea, though, that this Government had not done the work that it needed to do. And if you want the proof of that pudding, the proof was that in her third reading speech the Minister Judith Collins said that 183, I think, Government agencies were being consulted with around whether or not they would implement the New Zealand Business Number, that that was yet to be determined, and that there was \u201Chope\u201D that would happen in the near future. We heard that word used several times by the member Melissa Lee, who was the chair of the select committee. We heard that word used several times in her speech\u2014around how \u201Chopefully\u201D this New Zealand Business Number will be implemented across the public sector. Well, quite frankly, it is not good enough to bring a bill to the House and say: \u201CHopefully, the public sector will actually implement it.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000682\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EThis leads to the main flaws in this bill\u2014the two main flaws that were attempted to be dealt with during the Committee stage by my New Zealand First colleague on the select committee, Ria Bond, and my colleague from the Labour Party David Clark, with the two amendments that were put forward in the Committee stage and were voted down by this Government, which would have dealt with the two issues around the time line and the intention of this bill actually being realised. Unfortunately, sense did not prevail, and I think that is a deep shame because there were opportunities in this bill to make some real change for the business community, for the private sector, and also across the public sector across Government agencies. There have been words used around transforming the economy. Well, there is no evidence that this bill will, in the short to medium term, transform the economy. I think it is going to take another Government being voted in to actually see the realisation of the true intent behind this bill, and I think that is a deep shame because\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000683\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227ec3015a6e0d40aca4562c720bcbba5f\u0022\u003EBrett Hudson\u003C/span\u003E: I think it\u2019d be a deep shame if Labour were voted in, absolutely.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000684\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225216dccc3be845cdb3fc5ff9fa7d78cb\u0022\u003ECLARE CURRAN\u003C/span\u003E: It is a deep shame, and we were told this by numerous submitters. We were told this by the Chartered Accountants, we were told this by Federated Farmers, we were told this by other submitters\u2014that if this bill did not get implemented across the public sector, then it was a sham. And the outcome through this whole process was that the Government could not deliver. I think that is a testament to a Government that really has lost its way, a Government that is not doing the work that it should do before it brings a bill of this substance to a select committee, and a Government that really is not, as my colleague David Clark said, looking out for the interests of small business across New Zealand, is not paying attention, and is trying to introduce something that is actually not going to work in the short term. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000685\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EWe are deeply concerned that the Government has not outlined a clear plan or committed the necessary funds for the bill\u2019s stated purpose to be achieved. I think the Opposition, in good faith, did its best through this process to say that actually this is what the Government needs to do and that we need to have these things in place. But the Government was not listening and is just, as it does with all pieces of legislation\u2014or, you know, 99.9 percent of legislation\u2014railroading it through because it has the numbers on the floor of the House, even though some of the most significant submitters coming before the select committee really had severe concerns. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000686\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EOne of our concerns in the short to medium term is that this is just another number. We heard no convincing reason through this whole process why the IRD number should or could not be adapted to achieve one universal number for interaction with the Government. I do not know whether we have an actual number for how many actual Government departments have committed to the initial roll-out of the New Zealand Business Number, but we heard through the third reading speech from the Minister that there is going to be a plan to implement the legislation through whole-of-Government directions. That is just Government-speak for saying \u201CWe did not do the work. We did not do the work and we have to go back and actually consult properly with those different agencies to try to come back with some kind of figure.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000687\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EThese 183 agencies\u2014surely there should be some direction to those agencies around whether or not they are going to commit to this legislation. This is legislation being, presumably, passed in this House tonight. Why are those Government agencies not being required to commit to that tonight? Why is it going to take an unspecified amount of time for that to happen? What kind of signal does that send to the private sector and to small businesses across New Zealand about whether or not adopting yet another number is going to be effective? What kind of signal does this send to New Zealand about the economy, and the transformation of the economy that this bill is supposed to have the effect of? This bill is a shambles. It should not have been a shambles. It should have gone smoothly through all of its stages, but it did not. It has had stiff opposition from across the House around the substance of the bill and the deep flaws within it, and that is a significant issue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000688\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003ELabour recognises\u2014absolutely recognises\u2014the need to support businesses by cutting red tape where possible to reduce the cost of business transactions for small businesses, whether they are sole traders, partnerships, trusts, or whatever. But we believe absolutely that this Government has put itself in the position where it cannot deliver on the promise that lies behind this bill, which is why we are giving it only qualified support. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000689\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EThe bill hoped to enable Government to provide more consistent and joined-up services, saving businesses time and enabling greater e-commerce between businesses, and we believe that this bill falls disappointingly short in the short to medium term because the Government has provided no evidence\u2014no evidence\u2014that this will be anything other, in the short to medium term, than just another number. It has sold itself short, and it sold New Zealand short, by not providing a credible time line, by not putting the resources in place, and by not requiring the public sector and all those Government agencies to adhere to what it says is going to transform the economy. This is a disappointing bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022 data-id=\u00228ce57cb4e92d4f56b0ef949939324d06\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000690\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228ce57cb4e92d4f56b0ef949939324d06\u0022\u003EBRETT HUDSON (National):\u003C/span\u003E It is a pleasure to rise in support of the New Zealand Business Number Bill in its third reading. A previous speaker, Dr Clark, showed\u2014it is actually pleasing to see\u2014a very strong interest in small and medium sized business. But, actually, the New Zealand public were asked very recently about what they thought of the Opposition and its plans, and I think the public showed very strongly that they seemed to believe that the quickest and easiest way to massively grow the number of small businesses in New Zealand would be to put Labour in charge of the large ones.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000691\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002229f4ff9bcee747119e1b3310de31efcb\u0022\u003EClare Curran\u003C/span\u003E: I raise a point of order, Mr Speaker. This is a third reading speech, and this is a speech about a Government bill and not about the Labour Party.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000692\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002232af2c8ff8bf43a582868c433b6b44a5\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: I am listening carefully to the content, and any relevance is a matter for me to rule on. I am asking Brett Hudson to continue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000693\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224d1fe24b9ee646008fa712c3ceac00fd\u0022\u003EBRETT HUDSON\u003C/span\u003E: Thank you, Mr Assistant Speaker. I think that was well borne out in the contribution that Dr Clark had to make. Sitting on the select committee, we have seen this bill go through each of the stages and go through the submissions process and advice from officials. When we had the Committee of the whole House, what we saw was, quite frankly, a reckless amendment suggested on the floor, one that would force agencies to have to set aside other business\u2014other technology business; other business work\u2014simply to meet an arbitrary deadline that the Opposition might have liked to place. When I spoke on that, and when I reflected after the Committee of the whole House as we headed into this reading, I first thought: \u201CIs this merely an illustration that the Opposition members do not understand technology?\u201D. It could well be that, but then, on further reflection, I was worried that perhaps it is more symbolic of their not understanding business\u2014that they did not actually grasp what they would be asking public sector agencies to set aside in order that they might meet some arbitrary deadline set by the Opposition. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000694\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003EJust earlier this evening, we were debating the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. This is a tax transformation programme that is going to last for a number of years at the Inland Revenue Department (IRD). The Opposition members would\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000695\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022275b4648ecb74a1cb3199b2bab1af484\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000696\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be3c63717cdd4ca7bd9e1d5316ed6e99\u0022\u003EBRETT HUDSON\u003C/span\u003E: \u2014have the IRD set that aside\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000697\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002225ede107b67c4b12aeeec46caa16a9ed\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: That is not part of this debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000698\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226af8e03adc454258bbc9113f955857f0\u0022\u003EBRETT HUDSON\u003C/span\u003E: \u2014simply to meet the requirements of the amendment that they supported in the Committee of the whole House. So I wondered whether perhaps they simply had not grasped the business, and then it occurred to me that it could be worse. It could actually be the case that because they realised that Parliament, being sovereign, has the right to impose any conditions it chooses upon society, upon individuals, and upon public sector agencies, that just because it could, it would\u2014and it would do so without giving any consideration as to the other business or the other activities that those agencies are obliged to be delivering over the next 1, 2, or even more years. Quite frankly, the amendment and Labour\u2019s amendment to the amendment were not only reckless, they were feckless.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000699\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221a61e5998c0647d082323467bbb32de1\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! There is Speaker\u2019s ruling 137/4. You can mention in passing amendments that have been defeated in the Committee of the whole House but you cannot dwell on them at length. So I will ask the member to come back to the content of the third reading speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000700\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c70e3021ecbc494caabf6a2aec1a9215\u0022\u003EBRETT HUDSON\u003C/span\u003E: Thank you, Mr Assistant Speaker. So what we do have in the House at the third reading is the bill, unamended, which will provide a mechanism for small and medium sized businesses, in particular, to be able to undertake their interactions with the Government in a much more cost and time-effective manner; one that will help them to avoid the troubling and, quite frankly, wasteful exercise of doing things like repeating such basic public information as the nature of your business and the address\u2014that public register of information\u2014not having to repeat that with every agency you deal with if any of that should change, even such as an address if you relocate, and not having to provide that update to every single agency. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000701\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203fd985b-4fb8-4111-ba38-5033a254d962\u0022\u003EThis is a very effective and pragmatic bill. I have enjoyed working on it through each of the stages. It does appear as if it will pass in the House tonight, and I commend this bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022 data-id=\u00228cd253112e574a609a8101b031fbb9de\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000702\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228cd253112e574a609a8101b031fbb9de\u0022\u003EJAMES SHAW (Co-Leader\u2014Green):\u003C/span\u003E It is my pleasure to rise on behalf of the Green Party in support of the New Zealand Business Number Bill. I would like to acknowledge the work of the Commerce Committee and the officials in getting the bill to this stage and, in particular, I would like to acknowledge the chair of the select committee, Melissa Lee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000703\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EIt is nice to be able to see the passage of this bill at last. It is obviously not the longest bill to wend its way through the House, but it has taken over a year now to get to this stage. One of my questions, which I have always held about this, is why it requires an Act of Parliament to be able to issue numbers to trading entities and businesses in New Zealand. It does seem to me quite strange that it actually requires an Act of Parliament for us to pass a law for the Government to say \u201CHere you are. Here\u2019s a number.\u201D, but apparently it does, and so there you have it\u2014we are committed to this course of action. But it does raise a question to me about the extent to which legislation is required to do what seems to be a fairly basic function. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000704\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EI want to acknowledge that there are a number of concerns that have been raised at all stages of the process that have not been answered entirely adequately by the Government as the bill has wound its way through the process. One of those is the fairly well-worn concern, which previous speakers tonight have spoken on, in relation to the ability of the Government to actually deliver the New Zealand Business Number project to the people whom it is supposed to benefit, and to do so in a manner that is efficient and effective. There is what appears to be a lack of resources that are being provided in order to be able to deliver, once the legislation is passed. So I think that that is a concern that does still need answering. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000705\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EOne of the things that I think we need to do is ensure that, when we have passed this bill and the roll-out starts going, we actually have good methods of monitoring the effectiveness, because often when it comes to these kinds of programmes, these kinds of services, they can end up being of more benefit to the Government than they are to the people whom they are supposed to benefit. So they become a tool of the Government making things more efficient and effective for the Government that actually make things, in many cases, more difficult for the communities that they are supposed to serve. So I would like to know what kind of monitoring is going to be set up as a result of this to see whether this programme is actually delivering what it is supposed to do. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000706\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EOne of the other concerns that was raised at a number of stages was around privacy and data security. There have been a number of reasonably high-profile cases in recent times where the Government has lost data or data has become exposed, and in order to have a business number, obviously, users of it need to provide a reasonable amount of personal information. Again, we would need to know what kind of monitoring systems are in place to ensure not only that the system is being delivered effectively but also that users\u2019 data is safe and provided for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000707\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EHaving said that, there are a number of benefits here\u2014they have been fairly well trotted out in terms of the cost of doing business, of interacting with Government services, and having to reregister and have different registration processes with different agencies, and so on. So that set of benefits is, obviously, why the Green Party is supporting this bill\u2014because it will make business interactions with the Government more efficient and fast, or it is certainly intended to. It does provide the opportunity to harmonise more effectively with Australia, which is, obviously, very important to us and very important to businesses that trade with Australia. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000708\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EBut I just wanted to focus for a minute on some of the opportunities\u2014some of things that actually have not been spoken about either in the regulatory impact statement or in the business case that the Government put forward when it tabled the bill in the first place. These are things, I think, that would be well worth exploring. The first is the opportunity to use this to assist with the Government\u2019s big data set about trading enterprises and businesses in New Zealand. So having set up a unique identifying number and developed a trading relationship with not just limited liability companies but also trading entities of all sorts across the country, we should be able to get a much better picture than we currently do\u2014and I say we should be able to get a much better picture than we already have\u2014of the size and nature of New Zealand businesses and trading organisations. That, in itself, will become incredibly valuable in terms of the Government\u2019s ability to shape services to those different sectors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000709\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EI just wanted to use the example of that little Wellington-based company Xero, which is currently doing the accounts for most of the planet, and its ability, from that position, to be able to aggregate data to build up a very sophisticated picture about the nature of business and of trade in New Zealand and around the world. It actually has better data than the Government does, because, of course, it is doing the books for most of these organisations, or a very large number of these organisations. I know that the business number programme is not designed specifically to do that, but it does create the mechanism to enable that kind of big data collection and analysis later on. So I think that is an opportunity that we want to explore here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000710\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EThe second, which I have mentioned before, is the opportunity to try to use this to cut down on fraud and zombie companies, which is a large and growing problem\u2014the idea that people, in many cases small trades organisations, will simply shut down their business rather than pay the bills and then reopen under another name in order to get out of paying bills, and they will do this repeatedly. I get this a lot as I travel around the country, that people in business are constantly frustrated by this phenomenon, and there is not an easy way of dealing with it. One of the opportunities\u2014again, not explicitly provided for in the legislation\u2014that this may enable is the opportunity for us to have that one-to-one relationship with these trading enterprises and to use that to be able to cut down on instances of fraud and zombie companies, which are operators that are shutting down and then starting up without paying the bills from their previous entity. That is a second opportunity that I think we want to explore, having set up this programme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000711\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EThe third opportunity that I think this provides is the ability to create aggregate services. In New Zealand, large companies will have access to things like deals on cheaper petrol for company cars; they will have insurance deals, health insurance; they will be able to get bulk discounts on materials; and so on and so forth. Actually, the vast majority of enterprises in New Zealand, which are very small operators, do not have the scale to be able to tap into these kinds of deals. So the companies that are least able and most vulnerable actually are the ones that end up paying the higher prices, and it is the larger companies that have got the resources that pay the lower prices. I think being able to form this one-to-one relationship with all of these enterprises and trading organisations around the country does provide the opportunity to create aggregate services for very small micro-enterprises and so on, which otherwise would not be able to have access to them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000712\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EFinally, I think one of the obvious things here is that we already have business numbers in place for most of our companies in New Zealand, or many companies in New Zealand\u2014limited liability companies, and so on\u2014and all this really does is simply extend the same service, in many ways, to other organisations like social enterprises, State sector organisations like schools and district health boards, non-profits, charity shops, and so on, freelancers, and sole traders who are not covered by the other programme, and so the idea that actually everyone, no matter their trading form, will be able to interact with the Government in the same way and on an equal footing is a good one. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000713\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227c215736-b512-41de-8f0c-6c5543fcfce7\u0022\u003EIn conclusion, it is odd that it needs legislation to issue a number. There are some concerns that I do not think were addressed adequately as the bill passed its passage through the House. I do think that the bill does have the promise of many benefits and some unexplored opportunities, and so the Green Party is pleased to be able to support this bill in its final reading. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022 data-id=\u00225e6941a5703345b4974e0a948abb25db\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000714\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225e6941a5703345b4974e0a948abb25db\u0022\u003ERIA BOND (NZ First):\u003C/span\u003E I rise on behalf of New Zealand First to take this third call in the House tonight on the New Zealand Business Number Bill, which is, for the National-led Government, a very important piece of legislation that seeks to promote innovation and business. New Zealand First supports the intent of this bill, which is primarily to enhance the Government\u2019s initiatives aimed at achieving Better Public Services result No. 9: to achieve better business commitment by reducing the business costs from effort in dealing with Government by 25 percent by 2017. It aims to reduce the businesses\u2019 red tape for eligible entities, and it also aims to increase or lift the productivity of businesses, so, therefore, there is less time stuck on the phone trying to make contact with Government agencies and more time spent working in their businesses, especially for sole traders who work not only in their business but also on their businesses, as often they are the only ones who are actually within their business. And it also, ultimately, aims to increase the cost savings to businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000715\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EI am disappointed in the National Government members across the House who took calls in the Committee of the whole House on this bill, because a good amount of content on talking to this bill was merely\u2014well, it was simply a mechanical delivery, with very few impressive details coming out of the calls. That showed that those members did not fully understand the total effects of this bill and did not understand why my amendment would have helped to assist the Government to incorporate those Government agencies to adopt the New Zealand Business Number Bill. That showed the lack of care for ensuring that legislation set down in this House is fit for purpose, and the intent of this bill, particularly, could have been achieved with my amendment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000716\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EI want to say that I noted that in her opening statement tonight Minister Judith Collins mentioned the fact that the Government does not have complete buy-in from the nine agencies that are required to actually adopt the process to interact with the aim and intent of this bill. I just want to add that that is still putting the cart before the horse, because what the Minister failed to give this House, and New Zealanders who are actually in business in this country, was a time frame by which the agencies would be required to come into line and adopt the system so it can be interactive and it can actually aim to complete the intent of this bill and not just become another wasted resource. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000717\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EWhat this Government failed to do, in all of its members\u2019 calls taken in this House, was to back itself. It also failed to back small to medium sized enterprises. It failed to back sole traders. It failed to back trusts and incorporated societies. And that in itself showed the absolute failure to back its very own Government agencies, and to say that this was, indeed, a good, sound bill that would achieve its intent and purpose. It was simply a farce. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000718\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003ELet us remember that, during my Committee call\u2014and I do understand, Mr Assistant Speaker, that you have given a ruling to remind us that we cannot dwell too much on what is lost\u2014I provided the Government support for this bill from my amendment. It amended clause 28, which reads: \u201CGovernment agencies may use NZBN\u201D. For me, it was quite simple to change that clause to \u201CGovernment agencies must use NZBN\u201D. I knew when I introduced that amendment to the Committee that not all 880 agencies would be able to pick that up. I knew that and I understood that. The rationale for my amendment was to help assist the Government and Government agencies to become part of the single portal system, if that use is in accordance with the purposes of this legislation. Dr David Clark amended my amendment to provide the grace of time to allow the Government agencies to become part of the successful implementation of this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000719\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003ELet us remember that when the Government originally presented this bill to the House, the intent of this Government was to have all of the Government agencies included in this business number roll-out\u2014it would be mandatory. New Zealand First asks why this was removed from this bill. The only answer that I can see clearly is that this bill was poorly drafted, and, glaringly, the Government did not understand the financial risk to its own Government agencies. The reason that, fundamentally, the Government has failed to ensure its own agencies are kept up to speed at the administration and IT level is it has continually underfunded core expenditure to ensure robust, clean, efficient systems are regularly maintained. That should have been a strong focus, and that really is the fundamental reason why, all of a sudden, clause 34 was stripped from this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000720\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EMandatory participation by the Government agencies should be required, to ensure that the New Zealand Business Number does not become just another number, another business overhead, from another bill that has unintended consequences in inequality to entities and not Government agencies. Secondly, it makes me question whether the Government was muscled by its own agencies to pull them out of the business number process. Did it bow to pressure? Was that why clause 34 was actually stripped from this bill? I say that that is embarrassing. I say that that is actually really embarrassing for this Government, if that was the case. There is a formidable saying in the business world: \u201CThe devil is in the detail\u201D. I can assure you that, from this side of the House, we are getting used to this National-led Government doing the exact opposite\u2014the exact opposite\u2014and not understanding just how devilish the detail is, like in this poorly constructed bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000721\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EWe heard from various submitters, one of them being Chartered Accountants Australia and New Zealand, which opposed the clause being removed for the very reasons that I have already alluded to in both my second reading speech and the Committee of the whole House stage. It said that the benefits for businesses may be overstated. As a former businesswoman myself, I speak first-hand of the neglect this National-led Government has inflicted on small to medium sized businesses and sole traders, which make a significant contribution to our economy. That is no secret, and members of this House know this too. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000722\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EWe have heard in this House that for a period of time businesses have been asking for a more streamlined, secure, easier process with which to interact with Government agencies, and this bill goes part-way to allowing that. This bill is widening up the scope of catchment by including small to medium sized enterprises, sole traders, incorporated societies, and trusts. I go back to the fact that New Zealand First supports the intent of this bill, but without mandatory participation by Government agencies this bill will become another problematic one, and we may be here again in a year\u2019s time amending this bill again. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000723\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EI would also like to say that during the Minister\u2019s speech earlier, she mentioned that the agencies will be required within a length of time to hook into the system again. New Zealand First wants an answer: when will that be? Because a piece of string is quite long. How many times are we to see in the 51st Parliament, or have we seen already, unintended consequences like zero-hour contracts, retrospective discoveries like paying back beneficiaries, increased red tape\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000724\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227c1d74960bfa4a5aa8a1afc0d04cac08\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! Come back to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000725\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022318bcb12c05a491984d463184c308185\u0022\u003ERIA BOND\u003C/span\u003E: OK, Mr Assistant Speaker. Too many times we have seen the 51st Parliament amend Acts that have not been fit for purpose. This National-led Government has had so many instances of poor administration that I have actually lost count of how many times we have had to do this. Just take the news this morning of confidential medical records being found scattered across a Christchurch street. That is more embarrassment\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000726\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a8cd74d06d494aaaa41a5d7d41942eb1\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! That is not part of the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000727\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ec936cd293c0458d8552f11b3eb74d75\u0022\u003ERIA BOND\u003C/span\u003E: OK. On one hand, this Government expects thousands of owner-operator businesses\u2014in places like Invercargill, where I come from\u2014to upgrade their administration and IT systems to fit in with the New Zealand Business Number. The Government itself, on the other hand, has removed clause 34, which ensured that all Government agencies participated in the New Zealand Business Number process. I speak to constituents in Southland on a daily basis who are fed up with this Government\u2019s neglect, and I wholeheartedly agree with those constituents who tell me that this Government has an inability to really listen and to ensure that legislation that we progress in this House is fit for purpose and not a cost to businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000728\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EI know it is simply not achievable, as I said earlier, to have all 880 Government agencies participate and adopt the New Zealand Business Number and to hook up into the online system. I know that, and I knew that through the Committee of the whole House stage. The riddle in this particular bill, for me, is that when the Government introduced the New Zealand Business Number Bill to the House, it actually had clause 34 inside of it. Those provisions meant that it would be mandatory for all Government agencies to participate in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000729\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EIf Government agencies are so ill-prepared for the New Zealand Business Number that they are granted voluntary participation, as the Minister clearly spoke to earlier, with unplanned time frames, I ask how it is fair to small and medium sized enterprises that they are being forced into mandatory compliance within 28 days of the Royal assent. Enterprises like taxi operators, like dairy owners, like sharemilkers, like hairdressers, and like independent midwives\u2014how is this bill fair for those sectors? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000730\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ebb4ac6b-662b-498f-a27f-832d054e6585\u0022\u003EIn closing, New Zealand First will not be supporting this bill, for of all the reasons I have stated here tonight. It is not going to reduce red tape. It will delay significant recognition of the benefits to businesses using this bill. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022 data-id=\u00222fd258417edb4aed94ea0abeea0e9e48\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000731\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222fd258417edb4aed94ea0abeea0e9e48\u0022\u003ESIMON O\u2019CONNOR (National\u2014T\u0101maki):\u003C/span\u003E I am actually very pleased to take a call on the New Zealand Business Number Bill. I want to stress that, because actually the speech we have just heard was all about a failed amendment that did not come to pass, which has nothing to do, of course, with the third reading. I also take a little bit of umbrage at the member who has just been speaking, Ria Bond, in saying that the National Party has been taking rather short calls that are not very good at all. That is quite ironic, seeing that I am not reading from prepared speech notes but am actually just prepared to speak on the bill; nor am I launching into major ad hominem attacks on the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000732\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022\u003EThis is actually a remarkably simple bill, which is why, from this side, we are not taking an egregious amount of time to discuss it. Ultimately, it is about making business interaction with Government easier. We have heard a lot of talk about Government agencies trying to deal with Government agencies. This is fundamentally one of the points of the Business Growth Agenda, which the Government has clearly outlined and is now clearly delivering and that will make it easier for businesses to\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000733\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277333e3c-5658-4149-9cad-262a0deed378\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ee50033a423043d0af9dcf93d9979ee1\u0022\u003ETodd Barclay\u003C/span\u003E: Fundamental.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000734\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220510006bf3334d368910bc7f4b0ab803\u0022\u003ESIMON O\u2019CONNOR\u003C/span\u003E: Yes, fundamental, actually, as one of my colleagues\u2014in fact, the fine member for Clutha-Southland, Todd Barclay\u2014is saying. It is actually fundamental to good business\u2014that is, easy engagement, through the New Zealand Business Number, particularly with Government agencies but, of course, business to business. As we have heard from some people, it is also for New Zealand businesses to link in with Australian businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000735\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022\u003EIt is a simple bill. It has been very well accorded and very well looked after in the Commerce Committee, under the leadership of Melissa Lee. I was going to say that I was pleased it had the support of the whole House\u2014we even had the Greens on board, and, actually, I do thank James Shaw for his contribution; I thought that was worthwhile. I am disappointed but not surprised in New Zealand First. But good things take time\u2014they will come on board. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000736\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225b6b1d74-9e5e-42ba-a922-85b0ea7f5ab6\u0022\u003EAgain, it is a simple bill. I commend it to the House but also, importantly, I commend it to New Zealand businesses to sign up. Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00226d3b183cfdeb40a5b9848520feebc981\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000737\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226d3b183cfdeb40a5b9848520feebc981\u0022\u003ESTUART NASH (Labour\u2014Napier):\u003C/span\u003E It is with a sense of irony that I note that the member Simon O\u2019Connor stood up and criticised the New Zealand First member Ria Bond for an excellent speech that she gave because she read a prepared statement but spoke for 10 minutes\u2014I think it was a very enlightening speech\u2014when the member himself stands up, says absolutely nothing, and sits down after 3 minutes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000738\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002212c885dca01b44aebbe900c32306b5ab\u0022\u003EKris Faafoi\u003C/span\u003E: Was it 3?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000739\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022449db6516da24845b7e2eaa82beb8bdc\u0022\u003ESTUART NASH\u003C/span\u003E: Was it 3 or was it 2\u00BD? There is a word beginning with \u201Ch\u201D that we are not allowed to use in this House, but I think that everyone knows what it is.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000740\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is absolutely no doubt that making it easier for businesses to deal with Government departments and Government agencies, etc., is a very admirable outcome. It is a very admirable outcome, and if we can achieve that it would be fantastic, but one thing that I would say is that simply saying it will happen does not mean that it will happen. Simply putting a piece of flawed legislation in does not mean it will happen. The thing about this Government that I am increasingly seeing is that it does not walk the walk. It talks the talk: those members come in here and say \u201CWe\u2019re business-friendly, we want to cut red tape, we want to make things easier for businesses to get on with Government, and we want to make the interaction easier.\u201D But it is just not happening. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000741\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe had a bill here that was supported by every political party, but there was a problem in that bill. The problem in that bill was that companies were required to do something, but Government departments were not. When that happens, the trust that needs to be built up between business and Government will just not happen. Ria Bond and Dr David Clark put forward a very helpful suggestion that said \u201CHey, do you know what, we understand what this bill is trying to achieve; we understand the necessity, actually, of making it easier for businesses to deal with Government\u201D, because in this day and age things move at such a pace that if the information flow is in real time, then I believe it will make it easier. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000742\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe tax department is right\u2014the Inland Revenue Department is spending $1.3 billion on something called business transformation. It is a system that is going to make it\u2014I hope and I believe\u2014a lot easier for taxpayers to fill in tax returns and interact with the Inland Revenue Department. It is what we need in the 21st century. But if a bill like this is put in place and there is no time frame or there is no requirement for Government agencies to aptly implement this, then why would business do it? Why would business say: \u201COK, I can see a benefit here but the Government cannot see a benefit.\u201D? It has got to be a two-way process. One of the absolute privileges of being in this House is passing legislation that can make things easier for everyone. This bill could have done this\u2014it could have done it. It is a real missed opportunity, and it is such a shame.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000743\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIn my experience, there are three variables that businesses like to operate with, whether it is supply, whether it is in the private sector, whether it is the Government sector, whether it is domestically, or whether it is overseas. One of these variables is that they have got to build up trust. That is, the supplier, or the customer, or the client has got to do what they say they are going to do. The second thing is integrity. This comes down to the honesty of process. Trust is a subset of integrity, but it means slightly different things. It is slightly more than \u201CI say what I am going to do\u201D; it is: \u201CYou can trust my people, you can trust the processes, I am a good taxpayer, I do what I say I am going to do, but also, I get things done and let\u2019s work together in a constructive way.\u201D The third one is transparency. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000744\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is no point in introducing a bill like this, and taking up the time of the House\u2014I hope that we are not boring you, Mr Barclay; I see you yawning in the back there, but as a young pup you could actually learn some stuff about this. I would suggest that when that member goes and talks to the businesses in his electorate\u2014because he cannot talk to them out of experience, because he has none\u2014he actually asks businessmen and businesswomen what they want from Government. As opposed to saying \u201CWe know what you want.\u201D, how about you ask them: \u201CWhat would you like?\u201D. I will tell you what those businesses would like\u2014because I have worked in a number of businesses, large and small\u2014they will say: \u201CLet us have a two-way relationship.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000745\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is what businesses actually want: they actually do want to interact with Government. Believe it or not, they want their tax to be easy, they want red tape cut, and they do not want to be sitting at the dining room table at 10.30 at night angsting over GST. If we can make it easier for businesses\u2014and we have the potential to do this\u2014then it will deliver the $60 million worth of savings or reductions in compliance costs. But when we put out this sort of bill, which says \u201CBusinesses, you have got to do this.\u201D, but there is no time frame for the Government to do it, then all businesses do is go: \u201CThis is just another number. This is just another piece of compliance. This is just something else that the Government is throwing at me.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000746\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESo instead of having the desired effect of reducing compliance, what it actually does is it increases compliance. Instead of having the effect of saying \u201CWow, the Government has come out with something that I get; this is 21st century engagement.\u201D, all it does is makes them say: \u201COh, goodness me\u2014more information that the Government is going to collect about my business; more information that I am going to have to duplicate.\u201D So it actually has the opposite effect of what the intention is. And that is a real shame\u2014it is a real shame because this is the third bill that I have spoken on tonight where the Government had the opportunity to actually get it right, and in three out of three bills it has missed it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000747\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will tell you why I think this is the case: I think after 8 years it has sort of lost touch. It has become arrogant and has lost touch with what middle New Zealand wants. It has lost touch with what really drives business. It happens. Do not worry about it, it happens after 8 years. It happened to the Clark Government, it happened to the Bolger Government, and it is happening to the Key Government. After 8 years you forget to go to business, you forget to go to your key stakeholders and actually ask them what they would like to see, and you believe that you have got all the answers\u2014you believe that, as a Government, you know the answers and you can go to business and say: \u201CSee, this is what you want.\u201D Well, I can tell you, Government, you have actually got it wrong. All you have done is create compliance for businesses when you had the opportunity to reduce compliance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000748\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhen I look at the risk profile in the\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000749\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f16b181e169244c098851853078993d3\u0022\u003EKris Faafoi\u003C/span\u003E: The regulatory impact statement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000750\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e2efcd46f24b4c3cb0c4d1973d363540\u0022\u003ESTUART NASH\u003C/span\u003E: \u2014the regulatory impact statement, the RIS\u2014thank you, Mr Faafoi\u2014it talks about reducing compliance costs. That is the aim: \u201Creduces costs to business government by enabling fewer, more accurate business-to-business and business to Government transactions.\u201D I do not think that there would be anyone in this House who would disagree with that aim. It is fabulous, it needs to happen, and it is what 21st century information technology should be able to deliver. What the regulatory impact statement does say, which is quite surprising, is: \u201CHowever, these benefits are not quantifiable, as the NZBN is an enabler of opportunities, it does not deliver these opportunities.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000751\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESo what this basically says is that before any business is going to take this up they have got to see value. They have got to be able to see value and say: \u201COK, I am going to go through this process proactively\u201D\u2014because it will take a bit of time and they are going to need to access websites and put in information\u2014\u201Cbecause I see a significant amount of value.\u201D But what I can say, and what I would like to reiterate, is that if the Government departments that a business liaises with are not part of this, then the business will not see value. If a business has to have duplicate communications with different Government agencies, then this is defeating the point of what this bill is trying to achieve. I guarantee that within the first 12 months of a Labour-led Government, we will be going out to business and saying: \u201CHey, you know what? The intent of this bill was right; let us put it right in legislation.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000752\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis bill came to the House with good intentions. It came to the select committee with good intentions. New Zealand First and Labour were trying to work with the Government, with good intentions, to get this right, but because the Government knows best, because it has become arrogant and it has lost touch with what the market actually wants, we are now delivering a product that I very much doubt will get much uptake from business at all. This is another missed opportunity by a Government that is now out of touch and has forgotten how to ask the question: \u201CHow can we help you?\u201D. Instead, what it is doing now is saying: \u201CWe know best; this is what you want.\u201D That is the wrong approach to legislation. I think this is a missed opportunity, and that is a real shame. Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022 data-id=\u0022d5f50c334c9a402c8159dd043e0d8c62\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000753\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d5f50c334c9a402c8159dd043e0d8c62\u0022\u003EKANWALJIT SINGH BAKSHI (National):\u003C/span\u003E I stand in support of the New Zealand Business Number Bill in its third reading. The previous speaker, Stuart Nash, was just mentioning that this Government is out of touch. I can assure you that this Government is working at ground level and we are listening to businesses, and that is why we brought this legislation in. I think that member, for whom I have got a bit of respect, should go out and talk to the people. That party has been totally out of touch for a long time, and I do not see any light\u2014where the Labour Party will be in power\u2014for a long time. And looking at the recent polls, I think you are dreaming. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000754\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002236c8c596-d890-4cca-9767-1eeb5c9ce710\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286c2e461f15a430991676c1f2ceb1ed9\u0022\u003EDarroch Ball\u003C/span\u003E: Arrogance\u2014arrogance!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000755\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022df85c87415654156ab308e6c2f11a7ad\u0022\u003EKANWALJIT SINGH BAKSHI\u003C/span\u003E: Yes, I am coming to that side. It is not arrogance, New Zealand First. Your leader is better than their leader, so you can have some credit for it, I think. This bill\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000756\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228f156fce3b6e43d9a1c8cfbecb8ca443\u0022\u003ECarmel Sepuloni\u003C/span\u003E: We thought you were better than that, Bakshi.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000757\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a1bb6851ae84543bc7a29f716b1283a\u0022\u003EKANWALJIT SINGH BAKSHI\u003C/span\u003E: Sorry? [Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000758\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229def7529f5af4a209937b109e7af6162\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000759\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002248f9f107832a4e70b09780bf78bcc20c\u0022\u003EHon Members\u003C/span\u003E: Nasty. Nasty member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000760\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002299fd2d9a9a3a47248370fb38b5a24600\u0022\u003EKANWALJIT SINGH BAKSHI\u003C/span\u003E: Who is a nasty\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000761\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed69f960875e4648b8d50cfd4729d168\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! I want to hear what the member is saying. There is too much barracking across the benches. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000762\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226dc89bbf-c2ef-45c9-89e4-d2b5952d8d16\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a75bd1a51ed0405ab774287ddffd298a\u0022\u003EKANWALJIT SINGH BAKSHI\u003C/span\u003E: Thank you, Mr Assistant Speaker. As has been mentioned earlier, this bill will help businesses to cut red-tapeism. They have to give their details once and then, if they have to change, it is only once that they have to do it. But all other agencies can access those details for the business. With these words, I support this bill. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022 data-id=\u0022e258c2e594874ab58d351c0ebd2d2cfb\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000763\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e258c2e594874ab58d351c0ebd2d2cfb\u0022\u003EKRIS FAAFOI (Labour\u2014Mana):\u003C/span\u003E It is an absolute pleasure to take the final call for Labour on the New Zealand Business Number Bill, and to bring together some of the arguments that my colleagues have made during this final reading.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000764\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI do want to address some of the comments made by the previous speaker, Kanwaljit Singh Bakshi, and the fact that he believes his side of the House is not out of touch. Well, I think that if you put this piece of legislation together with an earlier piece of legislation that we were debating around GST you will find that this Government is increasingly out of touch with the likes of small to medium sized businesses. If you were a small business and you wanted the full effect of this piece of legislation, then you would want to see the kinds of changes that were proffered by Dr David Clark and by Ria Bond from the New Zealand First Party put into this piece of legislation at the Committee stage. They were not. If you were watching earlier from home about the GST taxation bill, you would want to make sure that the tangible products that are being bought overseas were tackled by this Government, and GST put on that. But this Government is not willing to do that. It is not willing to support small businesses and put GST on those products. So this Government is becoming increasingly out of touch with the likes of small to medium sized businesses.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000765\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI think that the legislative process that we have in this House is a good one. We start with a first reading, and then, through those various stages, a piece of legislation is meant to get better. It is meant to get better at the select committee because the public and businesses and organisations and political parties can have input into that process to make changes that, hopefully, all parties in this House can agree to. So we get through the select committee process into the second reading stage and the Committee of the whole House, where different parties and individual members can put forward changes, amendments, SOPs\u2014a Supplementary Order Paper, in parliamentary language\u2014to make things better. But what we have here is a piece of legislation that started out with great promise but has actually got worse during the parliamentary process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000766\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThe big question I want to ask is: what happened to clause 34? What happened to clause 34? It was there in the first reading, and it gave a mandate for all Government departments to use and prioritise the New Zealand Business Number, but somewhere along the process clause 34 went missing. The Government bottled out. It said: \u201CWe want to back this New Zealand Business Number, so we are going to make all Government departments use it.\u201D That was the essence of clause 34, but that went mysteriously missing after the select committee process, quite simply because the Government said \u201CWe want to do this.\u201D, and then it realised \u201CActually, we can\u2019t do this. We can\u2019t do it because, actually, we\u2019re not ready for this.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000767\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003ESo we are going to get ourselves into a farcical situation where the Government has introduced this New Zealand Business Number to make things more efficient for businesses out there, but we may have some businesses actually having to have two numbers, making things tougher and creating more red tape for businesses. Not only will they probably have to have an Inland Revenue Department (IRD) number, with which they will deal with the IRD, as per usual, but they may also have to have a New Zealand Business Number. So the whole premise of this piece of legislation, to have one individual identifying number for businesses, could be out the door because this Government is not backing itself, is not backing those Government departments, and is not properly resourcing those Government departments to make sure that this business number can be rolled out around all the relevant departments, and so it can actually be of use to small and medium sized businesses.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000768\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EOf course I would say that, because I am biased. I am on this side of the House. But, hold on. The Government was warned about this by the officials at the very beginning of the process. But do not take my word for it. I will read from the last paragraph of the opening page of the regulatory impact statement: \u201CA second issue for the success of the NZBN\u201D\u2014we all want that; you want that; we want that; we\u2019re going to vote for it; but I do not think it is going to happen\u2014\u201Cis ensuring that there is an efficient and rapid uptake of the number by businesses and state sector agencies.\u201D That sounds pretty common-sense. If you are going to introduce a number, make sure that Government departments use it and businesses use it. \u201CThis is needed to build momentum for infrastructure development and private investment in commercial opportunities.\u201D And here we go: \u201CA potential conundrum arises if agencies \u2018wait\u2019 for all businesses and, conversely, if businesses \u2018wait\u2019 for the agencies. Without significant uptake there is a risk that the identifier is not integrated and utilised widely, and just becomes another number, rather than a replacement for the many current identifiers\u2014as is intended.\u201D That is official-speak. That is from the advisers to the bill. In English that is saying that if we do not get the Government departments ready to use the number in an effective and broad enough manner, so that sufficient businesses pick up the New Zealand Business Number, we think the New Zealand Business Number could be a waste of time, ineffective, and make things harder for the very people whom we want to help.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000769\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022369853672f4248e98e00716b8c7e1ea6\u0022\u003EHon Dr Jonathan Coleman\u003C/span\u003E: Sounds like a Labour Party meeting.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000770\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002278e97a1b8a244bc3975a4423cd293af4\u0022\u003EKRIS FAAFOI\u003C/span\u003E: Ha, ha! You just keep eating your slops. Ha, ha! It reminds me of the kind of legislation you support and the answers you give at question time. He is still smiling from the slops. You just keep eating your slops. Ineffective, just like that Minister; hopeless, just like that Minister; and not willing to be rolled out\u2014we wish he was rolled out.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000771\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThis piece of legislation started with good intentions. Labour supported this legislation and thought it would get better during the process. But it has actually got worse. So a big message to those out there, those small business owners and medium business owners whom this Government says it is working for\u2014well, it started but did not finish the job. So all that hard work the Government said it was going to do for you\u2014to make your life easier, to save you money\u2014could be absolutely ineffectual because this Government bottled out. Again, where is clause 34\u2014the very important clause 34?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000772\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226f74cd8bcfa44cbba0462db1952c8e90\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: It is not in the bill. We can only talk about those things\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000773\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002242ad39e1366846bea2deaad0512aec64\u0022\u003EKRIS FAAFOI\u003C/span\u003E: Well it is not there, because they took it out.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000774\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220955033067b14b308508f76f4c6dab4b\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: Order! We are on a third reading debate. I have mentioned this previously. We are talking about what has been reported back from the Committee of the whole House, back to the third reading. I would ask members to concentrate on the content of a third reading debate and what has been reported back from the Committee of the whole House. And that also refers to amendments; I gave a ruling on that earlier.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000775\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224fda7304564d4a3c89890e430d6f4fd3\u0022\u003EKRIS FAAFOI\u003C/span\u003E: Thank you very much, Mr Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000776\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThis bill could have been better if the Government had taken on amendments from Ria Bond and David Clark that would have essentially reinserted a clause that was there at the beginning of the process, but is not there now. It would have put pressure on Government departments to take up this business number, to make sure that they were offering it to as many of the people as possible who interact with those Government departments, so that they could get the benefits of the number. The legislation that we have got now does not have that in it. And I think it is weaker for it because now there is no mandate, no pressure on those Government departments, to say: \u201CLook, the Government has introduced this number. The pressure is on us to get people out there signed up, so we can get the benefits of this.\u201D And quite good benefits were offered up at the very beginning of this legislative process. I think there was around a $60 million benefit to people\u2014individuals and businesses out there\u2014which is not an insignificant amount of money that could have been redirected into giving people pay rises, because they have not seen one of those for a while, or into creating some jobs, because that has not happened for a while. But no\u2014we do not think that entire $60 million is going to be realised, because the Government has bottled out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000777\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003ESo let me put this in very plain English, for those people who are listening. This could have been better. It started off very well. But the Government did not back itself and, therefore, has not supported those small and medium sized businesses, to make sure that this piece of legislation, which at the very beginning of the process had wide and broad support, could be effective. The Government will congratulate itself on passing this piece of legislation, but it is only any good if it is effective\u2014and it is not. It could have been better. This Government says that it backs small and medium sized businesses, but in this case it has not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000778\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI think that is another example of how this Government has got out of touch with the very people whom it says it supports.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022 data-id=\u0022388a9b43305546b4b3a08c45c82347cc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000779\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022388a9b43305546b4b3a08c45c82347cc\u0022\u003EPAUL FOSTER-BELL (National):\u003C/span\u003E E Te Mana Whakaw\u0101 Tuarua, t\u0113n\u0101 koe, t\u0113n\u0101 koutou katoa e ng\u0101 mema o Te Whare.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000780\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022\u003E[Acknowledgments to you, Mr Deputy Speaker, and to all you members of the House.]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000781\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022\u003EIn speaking in this third reading debate on the New Zealand Business Number Bill, I want to say that it is a very fine bill\u2014contrary to what the member who has just resumed his seat, Kris Faafoi, has said. The New Zealand Business Number Bill will save New Zealand businesses\u2014small, medium, and large enterprises\u2014up to $60 million. That is a significant saving to those businesses and one that only a National-led Government could deliver, as we know from the turpitudes they suffered at the hands of the Labour regime in years gone by.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000782\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022\u003EA significant part of this bill is giving interoperability with our trans-Tasman trading partners, so a New Zealand business number will be able to operate in Australia and an Australian business number will be recognised here. There will be mutual recognition. This is very important in the modern economy where we have disruptive technology and small start-ups taking advantage of the ability to operate across borders, particularly in the electronic commerce space.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000783\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207d42dbe-f05a-4a7a-8c23-0eecc14b72aa\u0022\u003EIt is a fine bill. It has been well considered by the Committee of the whole House, as well as the Commerce Committee. I want to commend the members of the select committee; the chair, Melissa Lee; the deputy chairman, Brett Hudson\u2014the very fine member from \u014Ch\u0101riu\u2014and also the Minister for Economic Development, the Hon Steven Joyce, who introduced the bill. I commend the bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00224b4ad87eab4d4db6b17515855968942a\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the New Zealand Business Number Bill be now read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 109\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 59; New Zealand Labour 32; Green Party 14; M\u0101ori Party 2; ACT New Zealand 1; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 12\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand First 12.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a third time.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000784\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002237ec82f20ee9409db79569b387125873\u0022\u003EBuilding (Earthquake-prone Buildings) Amendment Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000785\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00222259d65e244345d2b333388af416be94\u0022\u003EThird Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022 data-id=\u00229bfbbf30bf494fe796e33980bc30930f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000786\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229bfbbf30bf494fe796e33980bc30930f\u0022\u003EHon Dr NICK SMITH (Minister for Building and Housing):\u003C/span\u003E I move, That the Building (Earthquake-prone Buildings) Amendment Bill be now read a third time. This bill was first introduced in December 2013. Since that time it has been through a rigorous select committee process, which has resulted in several important changes. I want to thank both the Committee of the whole House and the Local Government and Environment Committee for their diligence in what is a pretty complex public policy issue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000787\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe Canterbury earthquakes highlighted the vulnerability of some of our older buildings to earthquakes and the fatal consequences of that vulnerability: 185 people lost their lives and many more people were injured in the 22 February 2011 earthquake, which I think will be etched in the minds of all parliamentarians and New Zealanders for many days hence. Major earthquakes stand out from other hazards. As a single event earthquakes can have a very large impact\u2014and 22 February 2011 provided such a dramatic example. I also note that, prior to the Canterbury earthquakes, Christchurch was not considered to be an area of high seismic risk, and it is a reminder that all of New Zealand carries some level of seismic hazard.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000788\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe Canterbury Earthquakes Royal Commission and the Government reviewed our current system for managing earthquake-prone buildings after the Canterbury earthquakes. Both reviews found that many earthquake-prone buildings in New Zealand were not being managed in a consistent, timely, and cost-effective way. Problems identified included too much variability in local practice, poor-quality information about the location of earthquake-prone buildings across the country, and local government on its own not having the capacity to be able to deal with this challenging issue. It requires a balance to be struck between the risk posed by these earthquake-prone buildings and the cost of upgrading and the impacts on heritage. If we are too soft we may risk the lives of hundreds of our fellow citizens whenever the next major quake occurs. If we go too hard, the impacts of costs on communities\u2014particularly rural and provincial New Zealand, as well as our heritage buildings\u2014would be too great. This bill avoids a one-size-fits-all approach, prioritising those geographic areas, buildings, and parts of buildings that pose the greatest risk. This ensures that our response is proportionate to those risks, that costs are minimised, and that we retain as much of New Zealand\u2019s built heritage as possible.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000789\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EGiven the nature and impact of this bill, the bill has rightly been subject to a thorough and rigorous examination by the Local Government and Environment Committee, and I have also worked hard to refine the proposals to make them as practical as possible. A key change is that the bill now varies the time frames for earthquake-prone building identification and strengthening relative to seismic risk. New Zealand will be categorised into areas of low, medium, and high seismic risk, and time frames for identification will be 5, 10, and 15 years, and time frames for strengthening of 15, 25, and 35 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000790\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EA second major change is the bill now prioritises the identification and strengthening of earthquake-prone education and emergency buildings. Schools, universities, and hospitals in high and medium seismic risk areas will need to be identified and upgraded within half the time frames of other buildings. Following strong submissions to the Local Government and Environment Committee, particularly from Canterbury, in high and medium seismic risk areas the bill prioritises those parts of an unreinforced masonry building, like a parapet, a facade, or a verandah, that could fall on to a public road or footpath, or other thoroughfare, that a council has identified as having sufficient vehicle or pedestrian traffic to warrant prioritisation. I acknowledge the points made by Ann Brower that highlighted the need for this particular change to the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000791\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe third significant change is that the bill now excludes buildings like farm sheds, retaining walls, fences, monuments, wharves, bridges, tunnels, and storage tanks from the earthquake building provisions. Applying the provisions to these structures would in many cases be impractical and in others be unnecessary because of other legislative requirements. Most residential buildings will continue to be excluded, as they are now. The methodology for identifying earthquake-prone buildings is to be set down in regulations once the bill has been passed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000792\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe bill also adds new measures to encourage timely upgrades. If a building is to be engaged in significant alteration, earthquake strengthening will need to be done at that time. The bill seeks to incentivise building owners to strengthen buildings in a timely manner through enhanced information and disclosure requirements: there will be a publicly available register listing all earthquake-prone buildings; and owners will be required to attach notices in a prominent place stating the degree to which the buildings go below the minimum standard. These changes are intended to help tenants and the public better differentiate between earthquake-prone buildings and to encourage and motivate building owners to strengthen those buildings in a timely way.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000793\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe bill clarifies the current definition of an earthquake-prone building\u2014in practice often referred to as 34 percent of the new building standard\u2014including that it applies to parts of buildings. I note that seismic risk around New Zealand explicitly takes into account that earthquake building threshold.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000794\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EThe bill continues to provide for an extension of up to 10 years to remediate category 1 listed heritage buildings, and exemptions from strengthening of some buildings. Exemptions from strengthening are intended to apply where the consequence of failure is low. Regulations will be made under the bill to clarify the granting of those exemptions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000795\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003EI want to conclude by saying that no building Minister will be able to give an absolute assurance of total safety of all buildings and structures to withstand the ferocious forces of nature that come from living in a seismically active country like New Zealand. I would put this bill in this context: in 1931 in Napier 256 people were killed from a population of 26,000\u2014that is 1 in 100 people; in Christchurch, 185 people were killed from a population of 370,000\u2014or 1 in 2,000. This difference of 95 percent improvement in survivability can largely be put down to the\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022 data-id=\u002285baa6d05e6149d5919c5743040794aa\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000796\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002285baa6d05e6149d5919c5743040794aa\u0022\u003EThe ASSISTANT SPEAKER (Lindsay Tisch)\u003C/span\u003E: I am sorry to interrupt the honourable Minister. The time has come for me to leave the Chair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000797\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201604122d03ab3b11b0496396903685037ab3e5000798\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EThe House adjourned at 10 p.m.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n  \u003C/body\u003E\n\u003C/html\u003E"